This article first appeared in The Edge Malaysia Weekly on September 21, 2026 - September 27, 2026

The chronicles of economic integration typically cite the European Union as the gold standard, Brexit notwithstanding. The US-Mexico-Canada Agreement, purportedly still in effect, is falling apart at the seams, thanks to President Donald Trump’s “liberation day” tariffs and Canada’s defiant retaliatory responses. Africa has embarked on a geoeconomic grand strategy to integrate the continent of 1.3 billion people, albeit at a formative stage.

Asean, made of sterner stuff, however, tells a more promising story, underscored by pragmatism, free of the obsession with a single currency and the prime mover of the world’s largest free trade agreement (FTA), namely, the Regional Comprehensive Economic Partnership (RCEP). The tale takes us to an extensive and complex ecosystem, built up over decades, that does the quieter work of holding the region together. As Asean enters a new phase of integration guided by the Asean Community Vision (ACV) 2045, how this ecosystem interacts with its sub-regions deserves critical examination.

Asean’s economic framework rests on three interlocking tiers. The first is the set of intra-Asean instruments — namely the Asean Economic Community, Trade in Goods Agreement, Trade in Services Agreement and Comprehensive Investment Agreement — which facilitate free movement of goods, services, investment and skilled labour across Southeast Asia while sharpening the region’s competitive edge.

The second tier is Asean’s network of external partnerships. Through the Asean Plus One agreements with China, Japan, South Korea, India and Australia-New Zealand, Asean has expanded market access to the world’s largest economies. The third tier is RCEP, the extensive regional architecture that brings Asean together with five of its major FTA partners under a single undertaking, reinforcing the bloc’s position at the centre of the Asia-Pacific’s economic architecture.

These arrangements have driven much of Asean’s economic transformation over the past decades. Yet the architecture continues to adapt to technological dynamics, shifting economic realities and an increasingly uncertain geopolitical climate. The negotiations for the Asean Digital Economy Framework Agreement (DEFA) were recently concluded and the bloc signed the upgraded Asean-China Free Trade Area (ACFTA 3.0) protocol and started working on the General Review of RCEP in 2027 and the implementation of the ACV 2045.

This evolution is manifested in the expansive integration agenda where attention is now turning decisively towards digital trade, data governance, supply chain resilience, sustainability and economic security. The preoccupation with removing barriers to transact trade has shifted to shaping the rules governing entirely new areas of economic activity. The upshot: an agenda broader in scope and more ambitious in intent. The task ahead, then, is not simply to widen integration further but to ensure it benefits more of the region, more evenly.

At the recent Asean Economic Ministers’ Meeting, the immediate challenge was how to translate regional commitments into deeper integration, greater resilience and tangible economic opportunities across a region with divergent geography, development and institutional capacity.

The agenda itself illustrates the breadth of the task. Alongside discussions on trade and investment, there were engagements with the region’s major external partners and an examination of whether Asean’s increasingly sophisticated economic architecture is also producing deeper integration.

This is where the sub-regions take on added significance and focus should extend to the mechanisms that will generate benefits to radiate across different parts of Southeast Asia. That indeed is the true test of the effectiveness of Asean’s economic architecture, namely, the synergies between the regional and national levels, including in the growth triangles, economic corridors, border areas and production networks.

Much of the discourse around these developments still centres on Asean as a bloc or on individual member states. Yet many of the real opportunities and friction points of economic integration surface most starkly at the sub-regional level.

Initiatives, such as the Greater Mekong Subregion (GMS), the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) and the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), occupy a distinctive place in Asean’s history, concentrated on connectivity, investment promotion, cross-border trade facilitation and closing development gaps in peripheral areas.

While GMS has helped develop a network of economic corridors across Southeast Asia, BIMP-EAGA has enhanced physical connectivity, tourism cooperation and cross-border economic activity in some of Asean’s most remote regions. Meanwhile, IMT-GT has strengthened linkages across the Malacca Strait and encouraged private sector participation.

Regional frameworks set the rules of the game; sub-regionals translate them into opportunities for businesses and communities. As the architecture continues to evolve, this relationship grows more consequential. As Asean’s integration agenda expands, implementation challenges multiply. But considerable gains await to be reaped. Partnerships, particularly with China, Japan and South Korea, have already enabled sub-regions to participate more deeply in supply chains and production networks.

The Asean-China FTA has expanded trade, logistics and manufacturing linkages while the Mekong countries and southern China have strengthened cross-border connectivity. Japanese and South Korean investment has forged deeper integration into regional production networks, and the Asean-Australia-New Zealand FTA has widened cooperation in services, education and agriculture.

RCEP, with its common rules of origin and streamlined trade administration, should make it easier for firms to plug into regional value chains and reach larger markets. DEFA may prove the most transformative instrument when it is signed and fully implemented, paving the way for swift digital integration. Cross-border e-commerce, digital payments, digital services and online entrepreneurship could allow businesses in less-developed areas to reach regional and global markets directly. Indeed, the next phase of integration will be built on digital connectivity, data flows and innovation ecosystems.

But this is not all plain sailing. Infrastructure, institutional capacity and economic capability vary vastly across the sub-regions, leaving major urban centres to reap the lion’s share of the gains from integration. Without policy intervention, it will be a case of “plus ça change, plus c’est la même chose” (the more things change, the more they stay the same), where new forms of integration risk reinforcing existing disparities. The digital divide poses another formidable challenge. Sub-regions with weaker digital infrastructure, lower literacy or limited access to finance may struggle to participate fully in the digital economy that DEFA is designed to unlock, creating new divides. Yet another challenge pertains to environmental sustainability. Parts of GMS already face mounting pressure from biodiversity loss, strain on fisheries and critical mineral extraction. Deeper integration can stimulate growth and investment but it can equally intensify pressure on natural resources where governance fails to keep pace.

Finally, there remains the issue of utilisation. Despite the proliferation of trade agreements, smaller businesses in remote regions often struggle to make use of the existing frameworks. Asean’s central challenge today lies less in negotiating new agreements than in ensuring existing ones are implemented and used properly. A recent study shows that despite decades of economic integration, intra-Asean trade as a share of the region’s total trade declined from 24% in 2010 to around 20% in 2024. This warrants the reinvigoration of sub-regional growth triangles and economic corridors.

These dynamics call for a rethink of what sub-regional initiatives are ultimately for. As the wider architecture grows more sophisticated, these initiatives may need to evolve from vehicles for new projects into implementation platforms for Asean-wide commitments. Apart from duplication of effort, competing priorities or fragmented approaches, there is also a risk that sub-regional arrangements become overly inward-looking.

Three priorities deserve particular attention. First, Asean should ensure that sub-regional considerations are incorporated into major regional initiatives, including DEFA implementation, the upgrading of Asean Plus One agreements and broader economic planning efforts. Second, the forthcoming RCEP General Review presents an opportunity to examine sub-regional impacts, such as small and medium enterprise utilisation, regional disparities and participation of less-developed areas. Third, economic integration and sustainability must be pursued together. Environmental resilience, food security, energy security and community livelihoods should be treated as integral components of economic development.

Asean’s economic architecture is becoming broader in scope and more ambitious in intent. Ultimately, the true test of successful integration is its impact on businesses, workers and communities across the Mekong, BIMP-EAGA, IMT-GT and other sub-regions. As Asean moves to implement DEFA, prepare for the RCEP General Review and deepen its network of external partnerships, closing the gap between regional ambition and local reality may prove one of its most consequential tasks in the years ahead.

Datuk Prof Dr Mohd Faiz Abdullah is executive chairman of Institute of Strategic and International Studies (ISIS) Malaysia

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