The Philippines is calling for stronger economic cooperation between ASEAN, Australia and New Zealand as changing trade patterns, technological transformation and supply-chain pressures reshape the global business environment.
Speaking at the 31st ASEAN Economic Ministers–Closer Economic Relations (AEM-CER) Consultation in Manila on 21 September 2026, Philippine Trade Undersecretary Allan Gepty said the three partners have continued strengthening their economic relationship despite an increasingly complex international trading environment.
The discussions placed renewed emphasis on making regional cooperation more responsive to emerging challenges, particularly through digital trade, stronger participation by micro, small and medium-sized enterprises (MSMEs), resilient supply chains and sustainable growth.
Trade Ties Continue to Expand
Economic relations between ASEAN, Australia and New Zealand have developed considerably over the past decades.
Bernama, citing the Philippine News Agency, reported that combined two-way trade among ASEAN, Australia and New Zealand reached US$183.9 billion in 2025. Gepty said the figure reflects deeper investment in regional supply chains and expanding opportunities for entrepreneurs, workers and communities.
Official ASEAN figures separately show that ASEAN–Australia two-way trade reached US$136.6 billion in 2025, while ASEAN–New Zealand trade stood at US$17.3 billion. Australian foreign direct investment inflows into ASEAN amounted to US$1.4 billion, while New Zealand investment reached US$119.2 million during the year.
The relationship is increasingly important as businesses diversify markets and production networks while responding to geopolitical uncertainty, shifting consumer demand and changes in international trade policy.
Upgraded AANZFTA Provides a Stronger Foundation
A key platform supporting this relationship is the ASEAN–Australia–New Zealand Free Trade Area (AANZFTA).
Originally effective from 2010, the agreement has become one of ASEAN’s major regional trade frameworks. Its Second Protocol entered into force on 21 April 2025, modernising the agreement for a more digital and interconnected economy.
The upgrade strengthened 13 existing areas, including rules of origin, customs procedures, trade facilitation, competition and electronic commerce, while adding new chapters on trade and sustainable development, MSMEs and government procurement.
At the latest Manila consultation, ministers discussed effective implementation of the upgraded AANZFTA and welcomed progress under the AANZFTA Implementation Support Programme, which is intended to help businesses translate the agreement’s provisions into practical commercial benefits.
Digital Trade Becomes a Growing Priority
Digitalisation was identified as one of the areas where cooperation could deliver significant practical value.
Gepty called for stronger efforts to facilitate digital trade and the wider digital economy, reflecting the rapid expansion of e-commerce, digital payments and technology-enabled services across Southeast Asia.
Greater compatibility between digital systems could make it easier for businesses to transact across borders, particularly as more SMEs seek customers outside their domestic markets.
Australia and New Zealand also bring established digital and regulatory capabilities that could complement ASEAN’s own efforts to build a more integrated regional digital economy.
For ASEAN businesses, deeper cooperation could support greater access to advanced technology, digital services and international markets while reducing some of the administrative friction associated with cross-border commerce.
MSMEs Need Greater Access to Regional Value Chains
MSMEs are another major focus of the ASEAN-CER partnership.
Gepty noted that smaller businesses are being required to adapt increasingly quickly as technology transforms markets and competition becomes more international.
For many smaller companies, entering global supply chains remains difficult because of financing constraints, limited digital capability, unfamiliar regulations and the cost of complying with different market requirements.
The upgraded AANZFTA’s dedicated MSME provisions are designed in part to address these challenges by creating a more supportive trading environment for smaller enterprises.
Helping more MSMEs participate internationally could broaden the benefits of regional trade beyond large multinational corporations and established exporters.
Supply-Chain Resilience Takes on Greater Importance
The consultation also highlighted the need to strengthen regional supply-chain resilience.
Recent disruptions — from geopolitical tensions and energy shocks to logistics bottlenecks and changing trade restrictions — have pushed companies to reconsider where they source materials, manufacture products and serve customers.
ASEAN’s diverse manufacturing base, Australia’s commodity and energy strengths, and New Zealand’s established agricultural and services sectors create complementary economic capabilities.
Closer coordination could help companies build more diversified supply networks while reducing excessive reliance on individual markets or transport routes.
ASEAN’s official statement following the consultation similarly highlighted supply-chain integration, economic resilience and inclusive growth as priorities for deeper cooperation.
Sustainable and Inclusive Growth Moves Higher on the Agenda
Sustainability has also become a more prominent component of the ASEAN–Australia–New Zealand economic relationship.
The upgraded AANZFTA includes a dedicated trade and sustainable development chapter, reflecting the growing importance of environmental and social considerations in modern trade agreements.
This creates opportunities for cooperation in areas such as clean energy, sustainable infrastructure, green technology and responsible supply chains.
At the same time, policymakers are placing greater emphasis on ensuring that trade produces broader benefits for communities rather than concentrating gains in individual sectors or major cities.
This is particularly relevant for ASEAN, where Member States vary substantially in income levels, infrastructure and industrial development.
Partnership Offers Stability Amid Global Uncertainty
Another important function of the ASEAN-CER framework is maintaining dialogue during periods of international economic uncertainty.
Gepty said closer cooperation can provide a platform for ASEAN, Australia and New Zealand to coordinate on emerging economic issues as the global trading environment becomes more complex.
That role has become increasingly important as protectionism, geopolitical rivalry and changes in major-market trade policies place pressure on the rules-based trading system.
ASEAN, Australia and New Zealand have repeatedly reaffirmed their support for open, predictable and transparent trade rules, including during a special AEM-CER consultation held in 2025.
Maintaining such frameworks can give businesses greater certainty when making long-term investment and supply-chain decisions.
Looking Ahead
The Manila consultation demonstrates that the ASEAN–Australia–New Zealand economic partnership is evolving beyond traditional tariff reduction.
Its next phase is increasingly centred on digital connectivity, MSME participation, sustainable development, supply-chain resilience and practical implementation of the upgraded AANZFTA.
With the participating economies representing a combined GDP exceeding US$5.6 trillion and a population of more than 700 million, the economic potential of deeper cooperation remains substantial.
The immediate challenge is ensuring that agreements translate into measurable improvements for businesses — simpler customs processes, greater certainty, stronger digital connectivity and easier access to regional value chains.
As global trade becomes less predictable, closer ASEAN cooperation with Australia and New Zealand could provide businesses with additional markets, diversified supply networks and a more stable platform for long-term expansion.
For the Philippines, which is chairing ASEAN in 2026, advancing this partnership forms part of a broader effort to keep Southeast Asia connected to major global economies while ensuring regional businesses remain competitive in a rapidly changing international environment.
