Southeast Asia intra-regional trade could prove to be a silver lining amidst rising global trade protectionism. As the global economic landscape shifts due to geopolitical fragmentation, climate imperatives, and rapid technological disruption, the global trading order faces profound uncertainty.
In this volatile environment, trade instruments such as Free Trade Agreements (FTAs) have become increasingly vital to ensure predictability and market access stability to sustain trade flows in the global economy. By mitigating tariffs, simplifying procedures, and offering legal protection, FTAs promote liberalisation and economic cooperation.
The region’s premier bloc, the 10-member Association of Southeast Asian Nations (Asean) is facing a series of challenges which comprise a profound change in the global economic landscape. This is manifested by a confluence of geopolitical shifts, trade fragmentation, climate imperatives, and rapid technological disruption.
For Southeast Asia, a region with a Gross Domestic Product (GDP) of some US$3.8 trillion (S$4.86 trillion) in 2023 and a robust 3.98-per-cent growth rate, the imperative to build enduring resilience is paramount.
To understand how firms are strategizing to meet these challenges, the National University of Singapore (NUS) led a multi-university Research Survey Study. Conducted between early 2023 and the end of 2024, the study surveyed 2,326 manufacturing and related companies across seven Asean countries: Singapore, Cambodia, Laos, Vietnam, Indonesia, Malaysia, and the Philippines. The respondent firms included more than 100 firms-based Singapore that are foreign and domestically owned, and ranged from multinational, large to small and medium enterprise (SME).
The Regional and Bilateral Safety Net
The Research Study examined ASEAN’s access to trade expansion through both regional and bilateral FTAs. Regionally, ASEAN has in place a set of intra-regional Economic Agreements, such as the ASEAN Trade in Goods Agreement (ATIGA); the ASEAN Framework Agreement on Services (AFAS)/ASEAN Trade in Services Agreement (ATISA); and the ASEAN Comprehensive Investment Agreement (ACIA). This is bolstered by the Regional Comprehensive Economic Partnership (RCEP) and “ASEAN-plus” agreements with Dialogue Partners including China, Hong Kong SAR, Japan, South Korea, India, Australia, and New Zealand.
Individual members also rely on bilateral networks. Singapore, for example, has an extensive network of 28 FTAs in-force, including the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) which entered into force on 3 May 2025. These provided Singapore based businesses with preferential access to markets as well as such benefits as tariff concessions and streamlined customs procedures. Additionally, agreements like the Comprehensive and Progressive Agreement for Trans-Pacific partnership (CPTPP), a free trade agreement with 12 member countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom, and Vietnam, aims to reduce trade barriers, promote economic integration, and foster trade and investment across the Asia-Pacific region.
These bilateral pacts are designed to facilitate trade and investment by reducing or eliminating barriers between participating countries. They offer Singapore-based businesses benefits that include swifter market access, preferential tariff treatment, and enhanced intellectual property protection. Leveraging such agreements requires a Rules of Origin (ROO) certificate, which validates that the products exported adhere to the criteria of origin under a specific FTA.
The Utilisation Gap
While many firms in this region already take advantage of these provisions, uptake remains uneven across the seven countries. The survey revealed that significant gaps remain in awareness, capacity, and procedural knowledge regarding FTAs.
While FTAs are crucial for predictable market access, their utilisation remains low. Less than a third of Singapore-based firms (29.7 percent) have ROO certification, and more than four in 10 (40.5 percent) are unaware of their status.
Key barriers include the “absence of relevant FTAs for their traded goods” (35 per cent), especially for tertiary and quaternary sectors like technology, information, financial planning, research, and development.
Furthermore, 30 percent of non-applying Singapore firms report that their export volumes are too small and fall below the financial value thresholds for Rules of Origin (ROO) certification. For example, under the ATIGA, the waiver threshold is USD$200. While this waiver cuts administrative costs, it highlights a gap in critical knowledge: these companies could utilise FTAs to enjoy the preferential tariff without needing the certificate, yet many remain unaware of this benefit.
Barriers to Global Expansion
Singapore-based firms pursuing overseas expansion also face a trifecta of obstacles, such as rising operational and coordination costs, limited capital, and taxation burdens. These are compounded by intense competition from lower-priced global markets that can produce goods at lower prices.
The companies also face difficulties securing skilled labour at sustainable costs and a general lack of expertise in navigating foreign market.
The Call for Systemic Support
To overcome these hurdles, firms are calling for “heightened systemic support”. The survey indicates a desire for stronger partnerships, financial assistance such as tax incentives, subsidies and export grants primarily to retain workforce and navigate high domestic costs.
They are also looking for targeted export readiness programmes involving training programmes, coaching, and technical assistance, as well as greater access to market intelligence and market research.
Respondents emphasised the need for clear documentation, helpful regulatory assistance, and convenient administrative procedures to standardise the export process.
Government agencies and industry associations have emerged as vital intermediaries. In Singapore, government agencies are the primary enabler for securing ROO certificates (31.6 per cent), followed by industry associations (21.1 per cent) and professional service providers (18.4 per cent).
A smaller but notable share also relies on business associates (15.8 per cent) or required no assistance (10.5 per cent). This underscores the critical role of public and private intermediaries in helping firms navigate the technical and administrative requirements of FTAs.
Bridging the Gap
In Singapore, recent moves have been made to support companies. Enterprise Singapore (EnterpriseSG) partnered the Singapore Business Federation (SBF) to launch the Centre for Future of Trade and Investment (CFOTI) to advise firms on in-depth tariff and FTA-related queries, including through seminars that cover how to navigate the evolving US tariffs.
An overview of FTAs and the provision of certain agreements is available on EnterpriseSG’s website as well. Firms seeking for tariff-related information as well as trade-related regulations and formalities, can also tap its dedicated Tariff Finder.
Similar support structures are evident in other countries, with particularly strong engagement from industry associations in Cambodia, the Philippines, and Vietnam. Business associates, suppliers, and clients also play a key role, especially in Indonesia and the Philippines.
In conclusion, aid in building capital, whether through loans, subsidies, or grants, particularly for SMEs, is a recurring need across all seven ASEAN countries. Government bodies and industry associations must continue to play a foundational role in equipping firms with the knowledge and confidence to navigate the complex, radically changing face of global trade.
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