ASEAN needs synthesised navigation of the economics-security nexus
Published: 23 May 2025 Reading Time: 6 mins-
Julia Tijaja
ISEAS–Yusof Ishak Institute
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Muhammad Habib Abiyan Dzakwan
In Brief
ASEAN must move beyond its compartmentalised approach to policymaking to respond to the increasingly interlinked areas of economics and security in a shifting global order. Maintaining ASEAN centrality requires coordinated institutional action, strategic coherence across the economics-security nexus and deeper engagement with regional frameworks. In doing so, ASEAN can contribute to upholding and updating the rules-based order that its member states depend on.
As member states assemble for the 46th ASEAN Summit in Kuala Lumpur, the bloc is facing a critical test. Great power politics are blurring the lines between national security and economic policy. Globalisation and economic interdependence warrant agenda-setting and cooperation that is no longer compartmentalised into each domain.
ASEAN community-building has long been advanced through the ‘Political-Security Community’, the ‘Economic Community’, and the ‘Socio-Cultural Community’ — often independently of each other. These mutually supporting pillars have historically allowed ASEAN to effectively respond to regional issues at the economics-security nexus. But as great powers readjust their strategic approaches, ASEAN’s compartmentalised model may no longer be tenable to address issues at the cross section.
As a home to small economies and middle powers embedded in global supply chains, ASEAN is reliant on a rules-based order for its survival. To navigate the changing order, ASEAN must effectively adapt and mobilise its institutions and frameworks
China’s Belt and Road Initiative, the US-led Indo-Pacific Economic Framework and other external plurilateral frameworks raised concerns over resources being diverted away from ASEAN cooperation.
Yet the bloc was able to respond with the ASEAN Outlook on the Indo-Pacific, which asserts its principles of openness, inclusivity and mutual trust, while leveraging existing ASEAN-led frameworks and mechanisms. Though not without its gaps, the policy document has drawn support from most ASEAN partners. Many have expressed willingness to align with its tenets in their engagement with ASEAN.
But the intensified interlinkage between the economic and security domains has increased scrutiny and restrictions on trade, foreign investment and reserve currencies. Some have disproportionately affected certain dual-use sectors and products, including critical minerals and emerging technologies.
In April 2025, the United States conditioned any modification to its planned reciprocal tariffs on whether trading partners ‘align sufficiently’ with its economic and security interests, while selectively exempting products or altering the tariff rate for certain countries. Beijing’s export restrictions on rare earth minerals and its warning to other countries against deals with the United States that undermine Chinese interests also underscore this strategic linkage. And the EU framework for screening foreign direct investment, which includes security risks, and its Anti-Coercion Instrument further reinforce the economics-security nexus. This trend has reduced ASEAN’s ability to keep economic policy separate from regional security issues.
The ASEAN Geoeconomic Task Force, formed shortly after US President Donald Trump announced his sweeping tariff policy, is a promising initiative. The task force should have a clear and strategic objective with the view to safeguard the region’s resilience and be tasked to effectively monitor regional developments in trade and security while identifying potential responses. This would require the significant involvement of relevant community-building pillars, internal analytical and coordination capacity, as well as effective reporting lines for collective decision-making.
The ASEAN Economic Community pillar must complement consideration of political and security matters and vice versa, and be reflected in ASEAN respective positions and actions. Private experts and business leaders should be consulted to ensure that ASEAN responses reflect the reality of interconnected security and trade. ASEAN otherwise risks encouraging its members to retreat into beggar-thy-neighbour policies or to bypass the region altogether in favour of rules-based multilateralism elsewhere.
ASEAN should coalesce its compartmentalised ‘Country Coordinators’ for dialogue partners when tackling issues traditionally processed independently through the Political-Security and Economic tracks. The grouping should also strategically cohere its messaging and positions across different international platforms such as the G20 and Asia-Pacific Economic Cooperation. Securing formal ASEAN representation in relevant groupings or establishing a mechanism similar to the one proposed for dialogue between members of the Comprehensive and Progressive Trans-Pacific Partnership and ASEAN could complement member-level engagement while amplifying ASEAN’s visibility and collective voice.
ASEAN can continue upholding its centrality by focusing on progressing key regional initiatives to strengthen resilience. This includes upgrading the ASEAN Trade in Goods Agreement, expediting negotiations over the Digital Economy Framework Agreement, actively promoting adherence to and utilisation of the Regional Comprehensive Economic Partnership and ensuring that various ‘ASEAN plus one’ free trade agreements address emerging concerns. The bloc should prioritise technical issues by effectively addressing concerns over non-tariff barriers, disciplines over the use of security exemptions, circumvention of rules of origin and unfair trade practices.
Diversified substantive partnerships are critical for ASEAN to reduce dependencies on great powers and mitigate the economic risks of any potential conflicts. Some possible efforts to consider are monitoring the implementation of the Treaty of Amity and Cooperation in Southeast Asia while expanding its accessions, optimising the utilisation of ASEAN Plus FTAs to strengthen supply chain resilience, coordinating with other countries on the reform of multilateral rules and institutions and pursuing joint initiatives on a plurilateral basis. The possibility of expanding and improving ASEAN Committees in ‘third’ countries and organisations to advance reform at selected multilateral institutions should be explored in addition to a more strategic tailoring of ASEAN’s external engagement.
The economics-security nexus will likely continue to feature prominently in policy discussions. Even if US–China tensions ease, a return to the rules-based international order of old is unlikely. Global and regional flashpoints will persist in an increasingly fragile multilateral order. Accordingly, ASEAN must update its efforts to realise its vision of becoming a resilient, innovative, dynamic and people-centred community by 2045.
An expected joint statement at the 46th ASEAN Summit in May 2025 is a crucial opportunity for the bloc to reassert its centrality and communicate ASEAN’s strategy in the evolving global order as the ASEAN Community Vision 2045 and its strategic plans are adopted. ASEAN must work to strengthen regional resilience and work with others to uphold and update the rules-based multilateral order.
Julia Tijaja is Associate Senior Fellow at the ASEAN Studies Centre, the ISEAS–Yusof Ishak Institute.
Muhammad Habib Abiyan Dzakwan is Researcher at the Department of International Relations, Centre for Strategic and International Studies, Indonesia.
This article draws on the authors’ recent Policy Brief, ASEAN’s Defining Litmus Test: Navigating the Economic–Security Nexus, published by CSIS Indonesia.