The rules governing what counts as an ASEAN-made product are coming under increasing scrutiny, as the region's trade architecture faces pressure from shifting supply chains and great-power competition, according to analysis published in The Diplomat.
At the center of the debate is the ASEAN Trade in Goods Agreement, known as ATIGA, which is currently undergoing a formal review. The agreement's rules of origin - the criteria used to determine where a product is considered to originate from - have become a focal point for policymakers and trade experts concerned about their fitness for purpose in today's geopolitical environment.
What rules of origin do
Rules of origin determine whether goods qualify for preferential tariff treatment under regional trade deals. In the ASEAN context, they are meant to ensure that products benefiting from intra-regional trade preferences are genuinely produced within the bloc, rather than simply routed through member states to take advantage of lower tariffs.
Critics argue that the current framework was designed for a different era - one defined by relatively stable globalization and minimal strategic rivalry between major powers. As companies reroute supply chains to avoid tariffs and export controls, particularly those tied to the United States-China trade conflict, the existing rules may be inadequate to distinguish genuine regional production from what trade experts call "tariff shopping."
Industrial strategy implications
The review of ATIGA comes as ASEAN member states are also developing more active industrial policies, seeking to attract foreign investment and build domestic manufacturing capacity in sectors such as semiconductors, electric vehicles and clean energy.
How rules of origin are written can have a direct effect on where companies choose to invest and how deeply they integrate into regional supply chains. Tighter rules can encourage genuine local production, but may also deter investment if compliance becomes too complex or costly.
Analysts quoted in The Diplomat argue that any rethink of ASEAN's rules of origin must balance the bloc's interest in attracting investment against the risk of becoming a conduit for goods that sidestep restrictions imposed by third parties.
A region navigating competing pressures
ASEAN has long maintained a posture of strategic neutrality, avoiding formal alignment with either Washington or Beijing. That position is becoming harder to sustain as both powers press Southeast Asian governments on trade, technology and security matters.
The outcome of the ATIGA review is expected to signal how the bloc intends to position itself industrially - whether it prioritizes openness and investment attraction or moves toward a more defined regional production standard that limits the use of ASEAN preferences as a workaround in broader trade disputes.
No timeline for the completion of the review has been publicly confirmed.
