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ASEAN and Australia are facing up to need for green cooperation

Post Date

21 May, 2024



Prof. Syed Munir Khasru

Nikkei Asia (Japan)
April 5, 2024


Last month’s ASEAN-Australia Special Summit in Melbourne has set the stage for a new, greener chapter in the bilateral relationship through a collaborative push into sustainable, technologically advanced economic practices.

Two-way trade between ASEAN and Australia reached 178 billion Australian dollars ($116 billion) in 2022, up 42% from a year earlier and exceeding Australia’s trade volume with Japan, the U.S. or the European Union.

This rapid growth has been propelled by upgrades to the 2010 ASEAN-Australia-New Zealand Free Trade Area agreement as well as the 2022 launch of the Regional Comprehensive Economic Partnership to which both sides belong. Australia and four of ASEAN’s 10 members are also members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which could further propel trade exchanges.

ASEAN’s exports to Australia have considerable room for growth. In 2022, Hong Kong alone took in more than twice as much of ASEAN’s goods exports as Australia did, according to government figures. Oil, both refined and crude, accounted for almost a third of ASEAN’s goods and services exports to Australia.

The burgeoning middle class and youthful population of ASEAN has created a lucrative market for Australian goods and services, although the country’s exports to the region are still dominated by commodities like natural gas, coal and wheat.

With both Australia and ASEAN states seeking a greener path, oil and gas can be expected to decline in importance in bilateral trade in the future. Yet Australia’s proficiency in renewable energy could then take on new significance as a pivotal asset for ASEAN’s climate transition.

Collaborative initiatives could include the transfer of clean technologies and the building of sustainable infrastructure. Australia could play a key role in retraining ASEAN’s workforce to equip workers for the demands of future-ready, low-carbon industries.

Collaboration on sustainable mining practices and environmental management in relation to critical minerals and metals could strengthen supply chains for low-carbon technologies and leverage the rich geological reserves of both Australia and ASEAN states. 

At last month’s summit, Singapore and Australia formalized a memorandum of understanding to create a Green and Digital Shipping Corridor between them. The pact commits the two to working together to explore opportunities to develop zero- or near-zero-emission fuel supply chains for the shipping industry, and to look at digital information exchanges to speed up port clearance.

Last year, Australia launched an AU$200 million Climate and Infrastructure Partnership program with Indonesia under which Canberra is helping to finance its neighbor’s energy transition. Over a five-year period, the funding will go toward supporting climate- and clean-energy-focused small business in Indonesia, building green infrastructure, technical assistance and other programs.

Australia also agreed last year to provide AU$105 million for clean-energy infrastructure investment and sustainable infrastructure planning in Vietnam, and launched a bilateral Green Economy Program to foster collaboration and development involving the private sector, too. These kinds of groundbreaking initiatives could be replicated with other ASEAN members in future years.

On a bigger scale, Prime Minister Anthony Albanese took the opportunity provided by the summit to announce the AU$2 billion Southeast Asia Investment Financing Facility to support infrastructure and green-economy transition projects.

The facility will provide loans, guarantees, equity and insurance for projects seen as boosting Australian trade and investment in Southeast Asia. Albanese said the government would also add AU$140 million into the Partnerships for Infrastructure Program, which assists ASEAN governments in areas like planning and procurement.

The socio-cultural relationship between Australia and ASEAN could be deepened, too.

People-to-people connections, especially among youth, could be strengthened through diversified education and exchange programs like the New Colombo Plan, which provides aid to Australian students studying in and interning in Indo-Pacific nations, and the Australia Awards Scholarships, which supports Indo-Pacific students studying in Australia.

Political and security cooperation is also growing in significance. At last month’s summit, Australian Foreign Minister Penny Wong announced her government would invest AU$64 million over four years in enhancing maritime cooperation with ASEAN states.

“What happens in the South China Sea, in the Taiwan Strait, in the Mekong subregion, across the Indo-Pacific, affects us all,” Wong said then. The summiteers also pledged to work together to tackle transnational crime, particularly cyberscam gangs.

The 50th anniversary of bilateral relations symbolizes an opportunity for ASEAN and Australia to work closely for peace, stability, and prosperity in the region and beyond. Continued engagement of Australians and ASEAN citizens will be crucial to sustaining cooperation, facilitating exchanges and realizing mutual benefit.