ACFTA 3.0: Greater integration likely, but who benefits?

The rules-based global trade system has been a primary driver of economic growth and development for both China and ASEAN. The creation of a stable, orderly trade framework built on the principles of progressively reduced trade and investment barriers and non-discrimination has provided the springboard for successful export-led development models and higher standards of living across the region.

That system is now under greater pressure than at any time in its eight decades’ history. At such a time, the impending upgrade to the ASEAN-China Free Trade Agreement (ACFTA 3.0) is particularly important. But the intensifying US-China rivalry casts a long shadow. For ASEAN, greater integration with China, through an updated ACFTA, presents a mix of tensions and opportunities.