UK-ASEAN Economic Ministers Hold Third Consultation

The Third ASEAN Economic Ministers (AEM) - United Kingdom of Great Britain and Northern Ireland (UK) Meeting was held on the 20th August 2023. The Consultation was co-chaired by H.E. Zulkifli Hasan, Minister of Trade of the Republic of Indonesia and the Rt Hon Nigel Huddleston MP, Minister of State for the Department for Business and Trade of the UK. The Meeting also welcomed H.E. Filipus Nino Pereira, Minister for Tourism, Commerce, and Industry of the Democratic Republic of Timor-Leste who joined the Meeting as an observer.

The Meeting was pleased to note that in 2022 the trade flows between ASEAN and the UK had risen by over 20% since 2021 in nominal terms, demonstrating that our trade is recovering post COVID-19. According to statistics, total UK trade with ASEAN increased by 21.4 per cent from £38.3 billion in 2021 to £46.5 billion in 2022. The Meeting also noted that the UK was the 7th largest investor into ASEAN according to Foreign Direct Investment (FDI) flows in 2022. In 2021, the stock of outward FDI from the UK to the ASEAN region was at least £25.1 billion.

The Meeting exchanged views on the regional and global challenges, such as the multidimensional impact of the pandemic, climate change, heightened volatility in the global financial market, inflationary pressures, and geopolitical tensions that impact global food and energy security, all of which could potentially affect economic and trade relations between ASEAN and the UK. The Meeting noted that the geopolitical tensions in some parts of the world continue to impact the global economy, i.e. constraining growth, contributing to inflationary pressures, disrupting supply chains, heightening energy and food insecurity, and elevating financial stability risks. The Meeting joined the call of ASEAN at the 56th ASEAN Foreign Ministers' Meeting for compliance with the UN Charter and international law as well as for a peaceful conflict resolution. The Meeting affirmed its commitment to exert utmost efforts to enhance cooperation between parties to mitigate the economic impact of these geopolitical tensions to the region as well as to their bilateral trade and economic relations, particularly on issues related to food and energy security. The Meeting emphasised that in order to navigate the challenging global environment, stronger and more impactful cooperation is essential.

The Meeting reaffirmed its commitment to a rules-based, non-discriminatory, open, free, inclusive, equitable, and transparent multilateral trading system, with the World Trade Organisation (WTO) at its core. The Meeting also highlighted its support to strengthen the WTO and ensure that it remains fit-for-purpose and forward looking by pursuing reforms to improve all its functions, including to have a fully functioning dispute settlement system. The Meeting also expressed determination to collaborate and coordinate on areas of common interest and contribute to the success of the 13th WTO Ministerial Conference (MC13), scheduled to be held in Abu Dhabi, United Arab Emirates, in 2024. The Meeting also recognised the need to look beyond MC13 and underlined the importance of strengthening the multilateral trading system so that it can respond to future challenges.

The Meeting thanked the UK for their support for Indonesia's Chairmanship of ASEAN 2023 under the theme 'ASEAN Matters: Epicentrum of Growth'. The Meeting noted the UK's support of Indonesia's Priority Economic Deliverables, specifically the ASEAN Framework for Industrial Project Based Initiatives and the Roadmap for Harmonising Standards to Support the Sustainable Development Goals. The Meeting noted the conduct of the UK-ASEAN Forum on Regional Industrial Integration, held at the ASEAN Economic Ministers Meeting 2023.

The Meeting noted that the UK and ASEAN are co-designing the new ASEAN-UK Economic Integration Programme, where the UK Government plans to spend up to £25 million to support ASEAN economic integration over the next 5 years.

The Meeting welcomed the progress in delivering the Work Plan to Implement the Joint Ministerial Declaration for Future Economic Cooperation (Work Plan) following its adoption last year. In this regard, the Meeting noted that a total of 26 activities, across 11 priority areas involving 26 ASEAN Sectoral Bodies, were carried out since last year, with an additional 60 activities planned for the succeeding years.

The Meeting welcomed the continued significant contribution of the UK in support of the ASEAN Economic Community (AEC) specifically in the areas of financial services, digital economy, science and technology, investment, competition, intellectual property, skills development, resilient supply chains, and standards. The Meeting welcomed the UK's continued focus on regulatory excellence, supporting ASEAN to build regulatory and standards systems which support global trade and investment.

The Meeting noted the implementation of the ASEAN Sustainable Leadership in Infrastructure Programme. The first cohort graduated in 2023, and the Meeting welcomed the course being available to a second cohort from across ASEAN. The Meeting further noted the UK's British Investment Partnerships toolkit, which provides a range of support to ASEAN Member States, and welcomed the series of activities implemented under the ASEAN-UK Digital Innovation Partnership (DIP), including roundtable discussions and business matching at the UK-Southeast Asia Tech Week, held in Jakarta in March 2023. The Meeting noted the launch of the 'Green Finance: Opportunities for Deeper UK-ASEAN Cooperation' Report, in the margins of UK-Southeast Asia Tech Week held in March 2023 in Jakarta, as well as the UK's support for the 'ASEAN Intellectual Property Ecommerce Gap Analysis'.

The Meeting looked forward to the outcome of the discussion on the proposed ASEAN-UK Collaboration on Financial Services. This collaboration aims to support ASEAN's financial integration through strengthening its regional market infrastructure, improving ASEAN's financial literacy and access to finance for MSMEs, and supporting ASEAN's development of green finance.

The Meeting also noted the UK's focus on science, technology and innovation (STI) cooperation through the delivery of the ASEAN i-Teams Project in collaboration with the University of Cambridge, which aims to develop the culture of technology commercialisation in the region. Two additional STI initiatives are under consideration for implementation: the Call on Research and Innovation for Development in South-East Asia (RIDA), which aims to address important issues in the field of health, climate resilience, energy transition, and agriculture, and; the UK-ASEAN Regional Training and Workshop on Engineering Biology that seeks to enhance Southeast Asian government officials' grasp of engineering biology's role in responsible innovation, economic security, and addressing global challenges.

The Meeting noted the UK's planned engagement with ASEAN to boost micro, small, medium enterprises (MSME) development and support women's economic empowerment.

The Meeting noted the importance of COP28 in November in addressing the urgent challenge of keeping global average temperature rise below 1.5°C, and developing and implementing solutions to the climate, energy and biodiversity crises. The Meeting shared the view that preventing the most severe impacts of climate change is essential to ensure ASEAN's long-term sustainable growth. The Meeting welcomed the development of the ASEAN-UK Green Transition Programme, which will help support climate policies across the region, strengthen the enabling environment for more green finance flows, and reduce the use of polluting sources of energy.

The Meeting underlined the importance of public-private sector partnership and noted the briefing by the UK-ASEAN Business Council (UKABC) on the various economic cooperation activities involving the private sector from both ASEAN and the UK, including the successful UK-ASEAN Business Forum, held in London in March 2023. The Meeting expressed appreciation to UKABC for their continuous support and invaluable contribution to strengthening trade and investment relations between ASEAN and the UK.

The Meeting affirmed its commitment to support Timor-Leste to be an ASEAN Member State by providing technical assistance, capacity building and other support to facilitate Timor-Leste's integration into the mainstream of ASEAN-UK economic relations. The Meeting also encouraged the Timor-Leste government to intensify efforts towards the preparations for ASEAN membership.