Are you curious about the current state of the relationship between the European Union (EU) and the Association of Southeast Asian Nations (ASEAN)? Hear Volker Friedrich in discussion with Chris Humphrey on the challenges and opportunities that the two regions face:
Challenges:
- Unequal levels of economic development in the ASEAN countries, which could pose major difficulties for attaining market commitments that would be equally beneficial and acceptable to all ASEAN countries
- The negotiation process is complex and requires a high level of commitment and an open economy
- The EU has pursued agreements with each ASEAN country individually, instead of negotiating a potential Free Trade Agreement with the bloc as a whole
- The negotiation covers not only trade and tariff issues but also other issues such as investment protection
- Colliding values between the two regions can be an obstacle
- Sustainability demands and new regulations imposed by the EU are in part seen as non-tarif-trade barriers by the EU
Opportunities:
- The EU and ASEAN have integrated the economies of their member states into a single market, totalling more than 450mn consumers in the EU and over 650mn consumers in ASEAN
- In 2021, ASEAN represented the EU’s third-largest trading partner, accounting for more than €215.9bn of trade in goods
- The EU is ASEAN’s third-largest trading partner, accounting for around 10.6% of ASEAN trade, while ASEAN, as a whole, is the EU’s third-largest trading partner outside Europe with bilateral trade in goods and services reaching €200 billion in 2021
- The EU is the biggest investor in ASEAN countries, with Foreign Direct Investment (FDI) stocks into ASEAN accounting for €313.6 billion in 2019
- The EU is a major development cooperation partner of ASEAN and its support for ASEAN’s integration process is ongoing2.
- The EU and ASEAN became Strategic Partners in 2020, opening a new chapter in their longstanding relationship1.
To address the challenges, it is necessary to facilitate people-to-people exchanges, expedite trade agreements, and enhance connectivity. The EU and ASEAN countries meet regularly to discuss issues and best practices and oversee the proper functioning of the partnership. The EU’s role in investment is vital, and as the list of EU initiatives and support for ASEAN grows longer, the partnership looks set to become stronger. In conclusion, the EU and ASEAN have a shared present and future, with both regions having integrated economies and shared values and principles. While there are challenges to overcome, there are also opportunities to strengthen the partnership and enhance cooperation.