In an era of shifting geopolitical alliances and rising economic uncertainty, smaller trade alliances can fulfil the gap, ensuring economic security and supply chain resilience. In this context, the idea of a trade bloc encompassing ASEAN, the UK, and Australia (informally dubbed ASEANAUK) has garnered interest.
Much has been said of the EU joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). So the CPTPP offers a key starting point for ASEANAUK, due to the overlapping membership of several ASEAN countries (e.g., Singapore, Malaysia, Vietnam, Brunei), along with Australia and the UK, in the trading bloc.
This existing accord eliminates tariffs on up to 94% of traded goods, harmonises some product standards, and establishes rules for digital trade and dispute resolution. Such institutional precedents could serve as a template for broader integration among ASEAN’s ten member states, Australia, and the UK.
| CPTPP Benefits | Impact on Current Members | Potential for ASEANAUK Expansion |
| Tariff Reduction | 94% of tariffs eliminated on goods traded between members | Could expand to non-CPTPP ASEAN members (e.g., Indonesia, Thailand) |
| Digital Trade | Data localization prohibitions, cross-border e-commerce facilitation | Extend to broader ASEAN markets to accelerate digital economy growth |
| Regulatory Alignment | Mutual recognition of standards in automotive, agriculture, and pharma | Could provide a foundation for deeper regulatory harmonization |
| Financial Services | UKs £61.3B annual financial exports to CPTPP markets | Potential to deepen UK-ASEAN financial ties through fintech and capital market access |
| Agriculture | 80% tariff reduction on UK whisky in Malaysia | Opportunity to expand agricultural market access to ASEAN’s large consumer base |
However, not all ASEAN nations belong to CPTPP. Indonesia, which accounts for ~40% of ASEAN GDP, and the Philippines, for instance, remain outside of it. Bringing them into an ASEANAUK arrangement would require extensive negotiations around market access, sensitive issues like raw material export bans, and alignment with CPTPP-level labor and environmental standards.
Potential Global Impact
ASEANAUK could emerge as a formidable economic bloc. ASEAN’s’ rising consumer base (projected to surpass US$4 trillion by 2030) paired with two advanced economies in the UK and Australia would significantly alter global trade flows. This diversification could reduce overreliance on traditional powerhouses like China, offering new avenues for investment and supply chain reconfiguration.
This bloc combines ASEAN’s $3.6 trillion economy, the UK’s $3.1 trillion services-driven economy, and Australia $1.7 trillion resource-driven market. This combined economic power could reshape global trade flows.
| Economic Bloc | GDP (USD Trillions) | Key Strengths |
| ASEAN | $3.6T | Fast-growing manufacturing hub, expanding consumer base |
| UK | $3.1T | Global leader in financial services and digital trade |
| Australia | $1.7T | Strong in agriculture, resources, and critical minerals |
| Total ASEANAUK | $8.4T | Potentially one of the most dynamic trade blocs globally |
The ASEANAUK trade bloc could reduce ASEAN’s reliance on China, which dominates its trade flows, by diversifying and strengthening its economic resilience amidst global tensions.
ASEANAUK can also capitalise on the shift in global supply chains and become a key driver of global supply chain resilience. With rising production costs in China, this creates an opportunity to establish alternative production hubs, as well as simplify regulations and reduce tariffs.
As companies relocate to Southeast Asia due to cost pressures and geopolitical frictions, a formal ASEANAUK bloc could streamline this process, facilitating new production hubs and expanding trade in key sectors like electronics, automotive, and consumer goods.
| Sector | CPTPP Benefits | ASEANAUK Potential |
| Manufacturing | Lower tariffs on machinery, auto parts | ASEAN-Australia-UK supply chain integration for high-tech industries |
| Energy & Resources | Australia’s strong mining sector, ASEAN’s nickel and rare earth reserves | Secure critical mineral supply chains for green energy |
| Agriculture | Tariff reductions on key exports like meat, dairy, and alcohol | Expand UK and Australia’s agricultural exports to ASEAN’s large food market |
| Digital Economy | Standardised rules for data flows, reduced restrictions | Opportunity for UK-ASEAN-Australia fintech and e-commerce expansion |
Meanwhile, in the domain of regulatory and technological benchmarking, greater collaboration can encourage the harmonisation of standards across multiple industries. For instance, the UK excels in financial services and digital trade.
Meanwhile, Australia brings strengths in resources and agriculture, while ASEAN offers manufacturing might and a vast consumer base. Together, these complementary assets can set new benchmarks for rules on data flows, fintech innovation, and sustainability practices.
Key Benefits for ASEANAUK Members
| Key Benefits | ASEAN Gains | UK Gains | Australia Gains |
| Access to Developed Markets | Entry into UK and Australia’s high-income consumer markets | Preferential access to ASEAN’s growing middle class | Greater economic ties with ASEAN markets |
| Investment and FDI | Increased capital inflows from UK and Australian investors | New opportunities in ASEAN’s infrastructure and services | Strengthened ties in natural resources and technology |
| Trade Resilience | Less reliance on China, more diversified exports | Stronger trade linkages in the Indo-Pacific | More export destinations for Australian agriculture and minerals |
The formation of a trade bloc between ASEAN, the UK, and Australia could bring about numerous benefits. One of the primary advantages is expanded market access. ASEAN would gain deeper entry into advanced economies, spurring growth and attracting foreign direct investment.
The UK, on the other hand, could solidify its post-Brexit “Indo-Pacific tilt“, gaining preferential access to dynamic Southeast Asian markets. Additionally, Australia would reinforce its already substantial trade links in the region, especially in resources, agriculture, and services.
A single, larger bloc would also hold more sway in international forums, potentially influencing global trade rules and balancing against other major powers. This increased negotiating leverage could be a significant advantage for the member countries.
Furthermore, the bloc could facilitate technology and knowledge exchange, with the UK’s digital trade frameworks helping ASEAN states modernize, and Australia’s expertise in minerals and agriculture spurring joint ventures with ASEAN countries rich in other commodities.
| Challenge | Impact on ASEANAUK | Potential Solutions |
| Diverse Regulations | ASEAN still developing common trade rules, UK has post-Brexit regulatory independence | Phased regulatory alignment using CPTPP frameworks |
| Economic Disparities | UK and Australia have more stringent standards than some ASEAN nations | Capacity-building initiatives to support regulatory compliance |
| Sector-Specific Barriers | Some ASEAN nations impose restrictions on data flows and foreign digital platforms | Develop a digital trade pact modelled on CPTPP Chapter 14 |
However, there are several regulatory and political hurdles that need to be addressed. One of the main challenges is the diverse regulatory frameworks among ASEAN’s ten members, which vary widely in their regulatory maturity. Layering in the UK’s post-Brexit rules and Australia’s frameworks creates a complex puzzle of policies to harmonise, especially in sensitive sectors like data privacy or financial services.
Economic nationalism is another issue, with countries such as Indonesia and Malaysia imposing export controls to protect domestic industries, which may conflict with the free-trade ethos needed for a successful bloc.
Geopolitical sensitivities also play a significant role, as China remains ASEAN’s largest trading partner, accounting for a sizeable share of the region’s commerce. Any perception that the ASEAN-UK-Australia bloc aims to “contain” or sideline China could strain regional relations, given.
Moreover, there is an asymmetry in development among the member countries — both within ASEAN and between Australia and the UK — with per capita GDP in some ASEAN states a fraction of the UK or Australia.
Leveling the playing field requires transitional arrangements, technical assistance, or capacity-building measures. Finally, comprehensive regulatory reforms demand both political will and significant technical expertise, which can be time-consuming and costly for lower-income ASEAN members to implement.
In terms of a pathway for development, gradual integration is key:
- Phase 1: Strengthen CPTPP provisions among existing members (UK, Australia, Singapore, and Vietnam)
- Phase 2: Extend CPTPP-style rules to Indonesia and Thailand via RCEP linkages
- Sectoral Pilots:
- Launch an ASEAN-UK-Australia digital economy pact, modeled after CPTPP’s Chapter 14
- Establish a green technology corridor, leveraging the UK’s £2.6B climate finance commitment
- Institutional Innovation: Develop “CPTPP+” working groups for non-traditional areas, such as critical minerals supply chains and maritime security cooperation in the South China Sea
While CPTPP membership provides a technical foundation, political will is essential for success. The UK’s projected 0.08% GDP gain from CPTPP highlights the need to build on CPTPP’s architecture, address ASEAN’s development priorities, and navigate great-power balancing acts.
Strategic Leverage: Plugging India-Japan in ASEANAUK
Integrating India and Japan into the ASEANAUK framework at a later stage presents a transformative opportunity to enhance regional trade by leveraging their complementary strengths. The ASEANAUK bloc could strategically utilize these partnerships to generate strategic synergies.
Current trade architecture has already laid the foundations for it in the form of the India-ASEAN CECA and ASEAN-JAPAN EPA:
- India-ASEAN CECA: This pact has already eliminated tariffs on 80% of goods and services, offering a blueprint for digital economy integration, such as the Singapore-India tech parks.
- ASEAN-Japan EPA: Covering 87% of tariff lines, this agreement includes modern digital trade rules, aligning with ASEANAUK’s need for tech-forward trade frameworks.
| Country | Core Strengths | ASEANAUK Integration Potential |
| India | Pharmace, IT services | Supply APIs to ASEAN’s $620B healthcare market; digitalise UK-AU trade flows |
| Japan | Robotics, quality infrastructure (majority of ASEAN megaprojects) | Deploy smart manufacturing hubs across ASEAN; lead green tech corridors |
Integrating India and Japan there is the potential to reinvent supply chains. For example, in criticical minerals, Australia’s lithium reserves — 47% of global production — could be coupled with India’s battery manufacturing under the PLI scheme. Meanwhile, Japan with its auto exports could utilise India’s automotive components industry to reduce reliance on China-dominated supply chains.
India-Japan integration could be accelerated through an ASEANAUK Digital Trade Zone initiative. This can adopt Japan’s Society 5.0 framework and India’s DPDP Act standards to target $150 billion in paperless trade by 2030. This will be supported by piloting blockchain-based customs clearance using the UK’s ASEAN EIP program infrastructure.
On the industrial front, an “East-West Manufacturing Arc” in India, keen to grow its manufacturing ecosystem, can link Japan’s Thailand-based auto plants with India’s Chennai electronics cluster. Additionally, a Pharma Innovation Network can establish R&D hubs pairing India’s 3,000+ WHO-GMP facilities with Japanese pharmaceutical majors investing in R&D.
In the green technology domain, ASEANAUK partners can jointly develop a carbon offset mechanism utilising Japan’s hydrogen technology (300+ patents), India’s 500 GW renewable energy target, and Australia’s carbon capture and storage (CCS) projects (80 Mt CO2 storage capacity).
To address trade imbalances, the bloc can introduce ASEANAUK Compensatory Tar Credits, allowing surplus nations like Japan and ASEAN to offset deficits through green technology investments in India.
Regulatory harmonisation efforts can focus on mutual recognition of automotive standards, such as aligning Japan’s JIS with ASEAN’s 2025 auto roadmap. Meanwhile, regulatory alignment on pharmaceutical approvals could be achieved through combining India’s CDSCO with ASEAN’s ACTD.
To mitigate geopolitical risks, ASEANAUK can additionally establish China+1 Procurement Rules, requiring 30% non-Chinese content for critical goods traded within the bloc. By 2030, these initiatives could add significantly to regional GDP; reduce China-dependent trade in electronics and pharmaceuticals; and position ASEAN as the prime beneficiary in high-tech foreign direct investment.
This integration requires phased implementation, starting with sectoral pilots in 2026-27 before full bloc ratification. Long term? The success of such integration would hinge on ASEANAUK aligning India’s Atmanirbhar Bharat industrial policy with Japan’s Economic Security Promotion Act while maintaining ASEAN centrality.
ASEANAUK: Hedging Against Volatility
| Pros of ASEANAUK | Cons of ASEANAUK |
| Increased market access and FDI | Regulatory fragmentation across ASEAN |
| Diversification from China trade dependence | Economic nationalism and protectionist policies |
| Supply chain resilience and integration | Geopolitical risks with China |
| Expansion of digital and financial services | Asymmetry in economic development |
Given the turbulence in world trade marked by protectionist trends, supply chain disruptions, and geopolitical frictions, forming ASEANAUK is both appealing and challenging:
- Appealing because it diversifies markets, reduces dependence on any single trading partner, and encourages modernization of industries through shared rules and technology.
- Challenging due to the need to reconcile vastly different economic interests, development levels, and external diplomatic relationships.
Ultimately, while CPTPP membership provides a strong foundation, success hinges on whether member states see enough long-term strategic and economic gains to warrant deep integration. Carefully phased negotiations, sector-specific pilot programs (e.g., digital trade corridors or green technology initiatives), and robust dispute-resolution mechanisms could pave the way for a functional ASEANAUK.
ASEANAUK represents an intriguing prospect for reshaping regional and global trade flows. Drawing on the CPTPP’s existing structure could accelerate negotiations, but the bloc would still face hurdles in regulatory alignment, economic nationalism, and diplomatic balancing especially with respect to China.
If these challenges can be managed and political will remains strong, ASEANAUK could become a powerful driver of economic growth and innovation, marking a new chapter in Asia-Pacific and global trade relations.
