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Home»Finance»ASEAN Looks Toward a Post-WTO Era
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ASEAN Looks Toward a Post-WTO Era

June 24, 2026No Comments4 Mins Read
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ASEAN Looks Toward a Post-WTO Era
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U.S. Trade Representative Jamieson Greer spoke with former U.S. Trade Representative Michael Froman at the Council on Foreign Relations (CFR) on May 26. Much attention fell on the U.S.-China summit results, but the more revealing aspect was the candor with which Greer discussed the direction of the trade order the Trump administration is pursuing.

Greer argued that the Chinese state-run economy is not merely an economic system but part of China’s political system itself, and that expecting Beijing to reform state-owned enterprises, reduce subsidies, or shift to a domestic-demand-led economy is unrealistic. He suggested that the United States had largely abandoned expectations that China would fundamentally reform its state-led economic model.

This does not mean Washington is relaxing its opposition to China. Rather, the U.S. is seeking to manage the effects of that competition. The aim is to control economic relations through tariffs, export controls, investment regulations, and rules of origin – ensuring competition while maintaining stability.

Greer also indicated that MFN (most-favored-nation) treatment, the cornerstone of WTO rules, would not sit at the center of the future trade order. MFN tariffs will remain a minimum floor, but actual market access and tariff conditions will be set through bilateral negotiations.

This is a major departure from the non-discrimination principle that has underpinned the postwar GATT and WTO systems. Washington intends to shift the core of the trade order from multilateral rules to managed trade conducted through bilateral negotiations.

Repercussions for ASEAN

Against this backdrop, ASEAN is increasingly viewed as a potential circumvention export hub for China. Greer repeatedly cited his concern about Mexico, which signed the USMCA (United States-Mexico-Canada Agreement), Malaysia, which concluded a reciprocal trade agreement with the Trump administration, and other Asian non-FTA countries becoming circumvention export hubs. While Greer did not mention China by name, the implication was clear.

See also  Why ASEAN Countries Often Run Trade Surpluses

Washington is concerned that Chinese companies will shift production to ASEAN countries and route goods through them to the U.S. In a managed trade environment, these production networks will face close scrutiny – extending beyond the country of final production to questions of Chinese capital involvement, the share of Chinese components, and compliance with rules of origin.

The U.S. is currently conducting Section 301 investigations into forced labor and excess production capacity, targeting not only China but key ASEAN nations and countries with close economic ties to Beijing. Under new U.S. trade policies, the ASEAN region is gradually coming under more scrutiny.

ASEAN Centrality Tested

Amid these shifts, ASEAN centrality is being tested. Historically, it has meant the ability to mediate among major powers and serve as an institutional base for regional cooperation. That is no longer sufficient. The key question is whether ASEAN can function as an economic community defined by institutional transparency, dependable supply chains, and rule-shaping capacity.

During the 2025 reciprocal tariff talks, ASEAN was unable to demonstrate collective bargaining power. Even so, Greer’s comments make clear that bilateral negotiations will remain the basis of trade policy; the implication is that ASEAN must strengthen its unity to protect shared interests even while individual members negotiate separately.

First, ASEAN must strengthen origin management and investment screening systems, demonstrating that the region is a genuinely transparent production base.

Second, ASEAN should accelerate the harmonization of customs procedures and the digitization of clearance processes — efforts already underway within the ASEAN Economic Community (AEC) — to give real substance to the region as a single market.

See also  3 Economic Stories in ASEAN to Watch in 2024

Third, ASEAN should leverage the Regional Comprehensive Economic Partnership (RCEP) and the ASEAN Digital Economy Framework Agreement (DEFA) to upgrade regional supply chains and enhance transparency. A region that develops into a hub for rule-making and digital connectivity, with strong local procurement and traceability, will be seen not as a conduit for Chinese circumvention but as a dependable center for free trade and the digital economy.

The main takeaway from Greer’s comments is not the conclusion of the debate over Chinese reform — it is the shift from free trade to managed trade. In the post-WTO era, the question for ASEAN will no longer be whether it can remain a free-trade hub but whether it can hold its place at the center of the regional order through robust systems and deeper integration. ASEAN Centrality will be judged not just by diplomatic mediation skills but by the ability to deliver dependable rules and systems.

ASEAN era PostWTO
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