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This episode of #WooSays is part of a special two-part series on the 47th ASEAN Summit and Related Summits under the theme “Inclusivity and Sustainability”.
In this first part, Professor Emeritus Datuk Woo Wing Thye and Melisa Idris unpack what inclusivity really means for ASEAN in 2025. From the inclusion of Timor-Leste as the bloc’s 11th member to the KL Accord ceasefire between Thailand and Cambodia, and a new tariff agreement between US and Malaysia, is ASEAN’s growing web of relationships truly mutually beneficial? Prof Woo also shares his bold ideas on which countries ASEAN could, or should, include next, and why expanding the bloc might be key to its future relevance.
In this first part, Professor Emeritus Datuk Woo Wing Thye and Melisa Idris unpack what inclusivity really means for ASEAN in 2025. From the inclusion of Timor-Leste as the bloc’s 11th member to the KL Accord ceasefire between Thailand and Cambodia, and a new tariff agreement between US and Malaysia, is ASEAN’s growing web of relationships truly mutually beneficial? Prof Woo also shares his bold ideas on which countries ASEAN could, or should, include next, and why expanding the bloc might be key to its future relevance.
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00:00Hi folks, welcome back to another episode of Wu Says.
00:14This is where we get real about the US and China and everywhere and everything in between.
00:20It's two superpowers but one global story.
00:24Now joining me as always is Professor Emeritus Datuk Wu Wingtai
00:29and we are talking about the ASEAN Summit because of course that's the biggest story in town.
00:35It carried the theme of inclusivity and sustainability.
00:40That's two big words that sound really good in communiques.
00:44But today on the show we want to explore what they mean in practice.
00:50So this is actually the first of a two-part miniseries on the ASEAN Summit
00:54and in this episode we will unpack inclusivity first.
00:58So what does inclusivity mean for a bloc like ASEAN in this moment of history
01:06and what are the limits of that inclusivity when interests collide?
01:13So Professor Wu, let's start there.
01:15Let's start big about what inclusivity means for ASEAN in the ASEAN context
01:21because this ASEAN Summit we welcomed a new member in ASEAN,
01:27our 11th country member, Timur Leste.
01:30So when you think about that context of inclusivity,
01:35what does it speak to you with the inclusion, the expansion of the bloc?
01:39I think inclusivity is a word that includes the following features.
01:47The first feature is we've got to have peace before we can do anything else.
01:53And the second part of inclusivity would be the peace is underpinned by mutual benefit.
02:02And the third part is that we want to stress ASEAN centrality,
02:12but centrality not in the sense of setting the agenda.
02:17The centrality in the sense that we want to be in the center of two powers
02:27without being a member, a clear member of any one of them.
02:33In other words, think of two spheres of influence
02:36and we are the buffer zone between the two spheres of influence.
02:40That's what centrality means.
02:43But that's a definition of we are able to occupy a buffer zone
02:50between two big powers.
02:54It's actually a very hard act.
02:55It's almost like standing in the middle of the road
02:58and you get run over by both sides, traffic from both sides.
03:03That is the danger of centrality.
03:07But let's first talk about the peace part.
03:14Well, thanks to Donald Trump's eagerness for the Nobel Peace Prize,
03:21he certainly helped the ASEAN chair in Malaysia
03:26to bring about peace in the Thai-Cambodian cash.
03:33The fact that the US is a strong strategic and economic player
03:42for both Cambodia and Thailand,
03:47it helped Malaysia tremendously.
03:50They were willing to leverage that power
03:54to get them to be more receptive to what Prime Minister Anwar was proposing.
04:02Okay.
04:03So I'm just going to interrupt you very quickly.
04:05When you say leverage that power,
04:07What do you mean by that?
04:08Well, you must understand that the big border dispute was sparked off
04:16by the issue of scam operations on the Cambodian side of the Thai border.
04:25And the Thais under pressure from the Chinese
04:28because the scam operations were run by Chinese gangs
04:32who had fled China to Cambodia
04:35and they were scamming mostly Chinese in the mainland.
04:39So there's one thing that China definitely wants is
04:44you close these scam operations
04:46and you stop funding the criminal elements of China.
04:51So Thailand shut off electricity flow.
04:55And without electricity flow, you cannot have internet.
04:58And if you cannot have internet,
05:00you cannot do long-distance scamming.
05:02So we have the situation that some Western interests
05:08got, you know, provoked existing tensions
05:12because Thailand and Cambodia have tensions over the border already.
05:17Like there was a dispute over a historical temple
05:22on who has ownership of the temple.
05:27It's almost like in Jerusalem.
05:31Jerusalem, you have the temple on the mount.
05:34You know, one part is Muslim, one part is Christianity.
05:41So there's always, there are areas of dispute.
05:44And so once under provocation from the scammers,
05:48The tension broke out.
05:49And the US being a strategic partner of Thailand especially and actually also a strong friend of Cambodia.
06:02Prime Minister Manet is a graduate of West Point, USA.
06:09So he was trained by the US military.
06:13So there are at least emotional ties, at least ties of friendship and so forth.
06:18I didn't know that.
06:19And the inevitable outcome was the US economic pressure.
06:25And I'm sure the Chinese brought pressure on both sides too.
06:28So with the two backseat drivers, Anwar was the front driver of the vehicle of peace.
06:39The important thing is that this was certainly a big gesture which persuaded Donald Trump to come here.
06:49The grandstanding of peacemakers, after all, he had Gaza behind him.
06:56He has the peace as hell so far.
06:58And now he has got another notch on his belt.
07:06Now, what that really is important is while here,
07:12he also has to bring something from Malaysia.
07:15And we signed the trade treaty, which basically set up very specific terms
07:25that the United States will not impose tariffs higher than 19%.
07:32That means that we can bargain for other items later on to be lower.
07:38That is the important word.
07:40Not higher than 19%.
07:42That is certainly very positive.
07:45And at the same time, possibly for playing ball, Thailand to sign a trade treaty with Trump.
07:54And that also limited almost the same terms as us.
07:59We know higher than 19%.
08:01And what you see is the immediate reaction of the market is that the US dollar, ringgit rate has improved for the ringgit.
08:14Although not massively, we went from 4.22 to 4.20.
08:21Trending up.
08:23Certainly.
08:24Strengthening.
08:24A favorable direction.
08:25A favorable direction.
08:26A favorable direction.
08:27A favorable direction.
08:27A favorable direction.
08:27That's right.
08:28And more, but that is a part that is not, that is potentially dangerous in the trade treaty.
08:40A danger and an opportunity.
08:44The trade treaty talks about it applies to goods of Malaysian origin.
08:52What do you mean by goods of Malaysian origin?
08:56It clearly cannot be goods that are imported from China and immediately reshipped from Malaysia.
09:04It is in no sense, credible sense, that it is a Malaysian product.
09:10So then the question is, what if the product came here and was semi-finished and we put our artistic touches to it and put in some advanced technological components in it and then we ship it off to China?
09:30Well, the question is, what is the percentage of value added that is Malaysian in origin and Chinese in origin?
09:39So, the whole thing of local content has been, what's the percentage of foreign inputs in your exports?
09:50Right.
09:50That number has not been specified.
09:54Because, let's face it, if we export coffee makers to the United States, there will have to be a chip inside.
10:04Not a high-level chip, but there will be a computer chip inside the coffee maker.
10:07And the cheapest producer of that kind of chip is China.
10:13So, clearly, to maximize profits, we should source from the lowest producers.
10:19Now, the question is, what will the Chinese chip comprise of the value of the product?
10:27If it is 10%, then that is a very high, 10% means a very high bar for us.
10:35That means that 90% have been Malaysian.
10:37And that has yet to be specified.
10:41Okay.
10:41The other thing that is definitely coming is, they might ask, within the product you export to us, what is the source of that technology?
10:52Even though the material components are Malaysian in origin, made by Malaysian SMEs, for example, the technology is from Huawei.
11:07Like, for example, if that is the condition, that they would not let us use Huawei chips, even though they are the cheapest, then there is a restriction.
11:18The definition of local content has gone from material, the origin of the material itself, to now the origin of the technology itself.
11:32Wow.
11:32That is the second step.
11:33The third step would be, well, we like to know the ownership of the firms that exported the products.
11:42Which is very pertinent for Malaysia.
11:44And yes, he said, and we want that to be a maximum of X percent of shareholders from China.
11:55You would say, how could the Americans possibly know?
11:59Because the Chinese investor will be hiding behind various identities.
12:04You know, they'll set up a Hong Kong subsidiary, the Hong Kong subsidiary, then invest in Malaysia, or they set up a firm in Thailand, and the Thai firm invests in Malaysia.
12:18So that's a big mess.
12:20And it's way beyond the ability of the Americans to enforce something like that.
12:25Which means they haven't figured out how to enforce it.
12:28So what is likely to happen after they have put restrictions on the source of your material inputs, source of your technology that you use?
12:40They would say, let's say, let's say 100 Malaysian firms export product X to Malaysia.
12:50And it meets the criteria of material input, being mostly from Malaysia, technology, very little small component from China.
13:00Then it's supposed to have ownership restrictions come up.
13:04How would the Americans figure it out?
13:07The right, the clever way to figure it out is since 100 Malaysian firms are exporting, you say, you pick arbitrarily 50% of them and say, you guys are clearly Chinese-owned.
13:20Proof that you are not.
13:22So the hard work of verifying ownership is pushed to the firms.
13:27So after these 50 firms have proven that only a very small part of the ownership, if at all, is from China, then you approve those.
13:37And then now you turn to the other 50 and say, you are the guys who are Chinese-owned.
13:45Then you get the goods from the first 50 you had banned, and the other 50 would not have to scramble to show their ownership and so forth.
13:54That would be a mess, and that would certainly hurt Malaysia as a production base.
14:00Yes, the cost to businesses, for sure.
14:03And so the question is, how can we get bargaining power so that the bar that is set is not so strict that it forces us to decouple from China?
14:16Because if we chose to decouple from China in terms of using their inputs, the Chinese will definitely retaliate and not let us export to the China market.
14:26And that is a market that's just as important to us as the American market, right?
14:33So the question is, if you are good, I anticipate unless the Cold War cools down considerably, there will be this escalation of rules of origin requirements in the treaty that we have signed.
14:48Because the treaty has just left undefined the rules of origin.
14:54Okay, so before we move any further, could I just get you to elaborate a little bit about the enforcement part?
15:03This trade deal is a legally binding document, essentially.
15:07So after signing, Malaysia will have to ratify and ensure that all the rules are complied with.
15:16If we fail to do that, and if enforcement is going to be an issue with it, does that mean that 90% tariff rate is...
15:26The 19%?
15:28Could the tariff rate be higher?
15:29Yes.
15:31Because basically the 19% is set in stone if you sign the treaty and it is deemed as enforced for both of us.
15:42What is not stated there, the weak part was, what's the definition of Malaysian origin.
15:50So that's the part.
15:52Now, how can we get a bargaining power on what is Malaysian origin?
15:57Bargaining power specifically?
15:59We want the components that we can, imported components we put inside, we want to get it from the cheapest producer, right?
16:08So we want that to be pretty high, as high as possible.
16:12Similarly, the technology.
16:14We want a free hand to pick the technology that is most suited for the product.
16:20Absolutely.
16:21And the ownership.
16:23We welcome American investors.
16:25We welcome Chinese investors.
16:26That's what centrality means.
16:28We stand in the middle of the road, but now how do we avoid being knocked down by both sides, right?
16:35Because if we have very strict, if we choose to decouple our production from Chinese inputs, technology and ownership,
16:46then basically we send a signal, we are sending on one side of the road rather than the center of the road.
16:53Now we'll be run over by the Chinese.
16:56For sure we'll be run over by one or the other.
16:58Yeah, exactly.
16:59So how can we have this bargaining power?
17:03Right.
17:03And there you can see in the fact that present at the summit was also Brazil.
17:16Brazil came for the first time.
17:18Right.
17:18South Africa came for the first time.
17:21And in the room are also the high government officials from India and we have the prime minister of China and a high official from Russia.
17:38You're naming all the BRICS countries.
17:41So BRICS are also in the room.
17:43Right.
17:44In the past, the Russians have been there, the Indians have always been there, of course the Chinese have always been there.
17:50But now B and S have shown up.
17:53Not the BS you're thinking of, but Brazil and South Africa.
17:58I'm glad you clarified.
18:00And the BS.
18:01So the complete BRICS is there.
18:05And this is a big signal that we want to be friends with Donald Trump when he wants to help us make peace in Thailand and Cambodia, we work with him.
18:14And then we want continued access to the US market.
18:17We welcome American technological firms to come invest in Penang to upgrade the semiconductor production.
18:27We want all of that.
18:29But we also welcome them, not only just from China, but from the rest of BRICS.
18:34So Prof, you're saying that the way Malaysia handled the bargaining power leverage was to bring BRICS into the room as well.
18:45Yes.
18:45And we also make the announcement, we had a meeting with Lula in which Brazil came and said, we support Malaysia's application for BRICS membership.
18:58So we are now moving beyond observer to actually putting in an application.
19:05Whereas we have been very cautious before.
19:07Only Indonesian.
19:09The I is India.
19:11Now there is another I in there.
19:13And that's Indonesia.
19:14Malaysia, the biggest country of ASEAN, is a member.
19:18And in a way, that makes it easier for Malaysia to justify why it's also going in.
19:25I'm not having sex with the R and the C, but I am sitting there with my ASEAN colleague.
19:33And Thailand has joined in the fund.
19:36Thailand is also putting in an application.
19:37Everyone wants to join the party.
19:39But do you think that that might tip or slightly sour or dampen enthusiasm in Washington?
19:51Because again, President Donald Trump has said before, you know, any countries being seen to be aligned with non-American interests might be punished or penalized or seem to be unfavorable to this administration.
20:05Well, but we are not computing to the BRICS either.
20:10Because we just expanded to include a very neutral country, Timor-Leste.
20:16So, at Timor-Leste, actually, it's a very good candidate in that we show that we are truly inclusive in the sense that it's not entirely based on win-win.
20:36In other words, there has to be reciprocity before I include you in my club.
20:44The truth is Timor-Leste is a very poor country and below the average ASEAN country in economic development and other dimensions of progress.
20:58I think it's a very good candidate in the sense that ASEAN countries will extend a helping hand to Timor-Leste.
21:09But that, at the same time, increased the size of the club, which also increased our bargaining power.
21:16But more importantly, this expansion, I think, will be the first phase of expansion.
21:24Because there are at least four other countries that have indicated strong interest to change.
21:31Okay, this is interesting.
21:34Some of these potential members give us the right color of truly being neutral.
21:41We are not just blindly BRICS because it is dominated by Russia and China.
21:47Because one of the members that is, one country that is seriously interested is Chile.
21:54Wow.
21:54I think that is a great gesture.
21:56It is a trans-specific partnership.
22:01And it is not so big that it will swamp us with its export of goods and so forth.
22:07And it is on the American, in the Americas, and a friend of the United States.
22:15So, we are friends with countries in that sphere of influence as well.
22:21So, ASEAN, like I said, there are other potential new members.
22:29And they have indicated strong interests that they want to join, like Sri Lanka and Bangladesh.
22:37That means we reach into the Indian Ocean, beyond Myanmar, to this too.
22:42But I think we will do that at some point.
22:46But then, right now, we should reach across the Pacific and get in the Chileans.
22:53Now, at least, the Philippines will not feel so, being the only Spanish heritage country,
23:03you know, in a place that's so Anglo and Dutch dominated, French, Anglo.
23:08And now, we've got the Spanish element that is strengthened.
23:12Amazing.
23:12And furthermore, it has got a very good, very strong sectors in agriculture.
23:21I think that would be, if I have my preference, among these members that are lining up to join,
23:31I would extend out and say, Chile, you're very high on the list.
23:35Excellent.
23:36Did you see anything else in the ASEAN Summit that you thought really spoke to you?
23:42That this was, I have to say, this was the biggest ASEAN Summit that Malaysia has hosted.
23:49And the ability of the chair of Prabhupada Ibrahim to have brought all these global big powers into the room for the summit
23:59was really quite masterful, in a sense.
24:02So, what did that say to you about ASEAN's role in its ability to hopefully be inclusive in the region,
24:14but also in what is a changing world, in shifting global powers, shifting multipolar world, essentially?
24:22Yes.
24:24I think one of the developments that was not given much attention was the setting up of a, you know, that is track one, track two, right?
24:37Track two is government, track one is government, track two is civil society, interactions.
24:44That is a formation of a 1.5.
24:49The 1.5 is a geo-economic group that the two of the most active members in this geo-economic task force
25:04is Deputy Minister Liu Jin Tong and former Trade Minister of Indonesia, Mari Pangkesto.
25:14That particular, they have done a report, and I think basically it spells out the geo-strategic position of ASEAN,
25:28stating in quite clear terms, we are friends to all, and not only joints, friends to all,
25:36we actually have a strategy underpinning how we would engage them to the two sides
25:43and show that we are out to promote peace between the two of them,
25:51but the truth is we are really not able to promote balance between the two of them.
25:56They have to balance themselves.
25:57Yeah, absolutely.
25:58But we were being united and big and having a commitment to, we will not take sides.
26:07ASEAN, as they say, is incoherent because we each have different degrees of affiliation with either the US or with China.
26:16It's not uniform, for sure.
26:18That we certainly have different degrees of assessment of who are more in line with our interests, our values, right?
26:29Then we are often accused of being ineffective.
26:33Incoherent for sure, ineffective.
26:35You know, look at the kind of things we have not been able to bring peace to Myanmar.
26:39Myanmar, absolutely, yes.
26:41But that is really not effective, because the only kind of peace deal that works would have to be Myanmar-initiated and Myanmar-owned.
26:49How could an outsider come in and say, this is the peace term, like what the Americans have done in Gaza?
26:56But even then, it was not even-handed.
26:58The Israelis certainly got started.
27:00Now, let me get back to the whole thing, is that we now have a clear statement of, despite being coherent, ineffective, we are indispensable to maintaining peace, keeping ourselves from being run over by both sides of the road, by staying together, by staying big.
27:23I was just going to say, coming back to the wonderful analogy that you had in the beginning, was now the middle of the road, that little buffer zone you talked about, is getting bigger and bigger and bigger.
27:34And maybe with kind of collective economic collaboration within the region, it might get safer in that little buffer zone of ours.
27:43Well, that means that staying in the center of the road, we are big enough that whoever banged us will have his tires blown up.
27:53Well, at least they can see us.
27:54Prof Wu, thank you so much for helping us unpack all the things that went down at the ASEAN Summit, getting real about the US, China and everything, everywhere in between, which includes what happened at the KL Convention Centre.
28:09So that's all for this episode of Who Says We Will Be Back with another episode on the ASEAN Summit very soon.
28:16I'll see you in that episode. Bye, folks.
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