US business group urges ASEAN to tear down trade barriers

United States-based companies are pressing members of the Association of Southeast Asian Nations (ASEAN) to resolve persistent structural and regulatory bottlenecks to safeguard the region’s standing as a prime hub for trade and investment.

In a position paper dated Sept. 9, the US-ASEAN Business Council (USABC) stated that maintaining regional competitiveness hinges on tackling barriers that slow economic transformation.

USABC said patchy regulatory frameworks, non-tariff barriers, and conflicting technical standards across ASEAN member states as major operational hurdles for American firms.

“These differences increase compliance costs, complicate cross-border operations, and reduce the efficiency of regional value chains,” the council stated.

USABC said small and medium-sized enterprises (MSMEs) aiming to expand internationally bear the brunt of these hurdles, as they lack the deep pockets required to navigate fragmented market requirements.

Compounding these issues, the council said divergent approaches to digital sovereignty and the lack of a standardized regional definition threaten to fragment Southeast Asia’s digital economy further.

“Addressing structural and regulatory gaps through greater coherence, transparency, policy connectivity, and consistent implementation will be essential to strengthening ASEAN's long-term competitiveness,” USABC said.

USABC said ASEAN could enhance regulatory cooperation among members through effective implementation of existing regional commitments, such as the Upgraded ASEAN Trade in Goods Agreement (ATIGA).

The Upgraded ATIGA, which is set to be effective in 2027, will pursue enhanced mechanisms around trade facilitation, customs procedures and modernization, and greater regulatory coherence across ASEAN.

These reforms are projected to digitalize trade processes, improve transparency, and reduce compliance costs, allowing businesses to move goods more efficiently and seamlessly across borders.

“The Upgraded ATIGA is important for companies operating in the region as it has the potential to strengthen ASEAN's attractiveness as an integrated manufacturing, investment, and supply chain hub,” said USABC.

Meanwhile, USABC said that ensuring the benefits of regional integration remain a major challenge within ASEAN given the inclusivity and capability gaps across members.

It noted that many MSMEs in the region continue to face barriers to participating in regional and global value chains due to limited access to technology, financing, innovation, and digital platforms.

Workforce readiness likewise varies across ASEAN members, with different levels of capability when it comes to the growing demand for skills in digital technologies, artificial intelligence (AI), sustainability, and advanced manufacturing.

USABC said addressing these gaps will be essential to promoting inclusive growth, enhancing productivity, and ensuring that every member state can benefit from the region's economic transformation.

The council said it stands ready to support ASEAN by providing capacity-building programs to strengthen institutional capabilities, MSME readiness, and workforce development.

“Continued implementation of regional commitments, coupled with stronger public-private collaboration, will further position ASEAN as a trusted hub for trade, investment, and regional value chains.

USABC’s position paper is set to be presented during the upcoming ASEAN Economic Ministers' (AEM) Meetings in Manila from Sept. 20 to 22.

Source: Manila Bulletin