The aspirational RCEP and why it matters for Asean amid external risks

LAST week's sharp sell-off in Asian financial markets following steep losses in US equities was another stark reminder of how the region is so closely tied to developments externally and needs to build buffers against potential external shocks.

Risks are mounting. Experts expect the threat of a trade war as a result of the US-China spat over new tariffs to hamper global growth. That worry, coupled with an environment of rising US interest rates, has rattled financial markets.

To soften the blow from external headwinds, Asean - the fulcrum of regional economic cooperation in South-east Asia - needs to crank up efforts to bolster domestic demand as well as to persevere as a bloc and tighten intra-regional ties.