Goods trade between the EU and Southeast Asia amounted to 274.9 billion euros last year, about 6 percent more than a year earlier and over 50 percent above the 177.9 billion euros of ten years ago. ASEAN has now become the EU's third largest trading partner, after the United States and China.
If current negotiations proceed according to plan, the EU could have free trade agreements with six of the eleven ASEAN countries by mid-next year. This will gradually create a network of bilateral trade agreements, even though Brussels and ASEAN as a whole do not have a free trade agreement.
The process with India is already well advanced. Negotiations have been completed and the European Commission has submitted the result to EU countries for signing and conclusion. Further European approval procedures are then required before the agreement can actually come into force.
Promotion
Philippines
An important milestone was reached this week with the Philippines. Brussels and Manila have reached substantial agreement on the free trade agreement. The technical and legal elaboration still needs to be completed before the agreement can be formally finalized and signed later.
Philippine President Ferdinand Marcos Jr. and Commission President Ursula von der Leyen discussed the outcome by phone. Marcos emphasized that the agreement must benefit, among others, Filipino farmers, manufacturers, consumers and small and medium-sized enterprises. New export opportunities will also arise for European farmers and food producers.
The agreement with India lowers or removes import duties for a large number of products. Automobiles form an important part of this. The agreement uses quotas and lower tariffs to gradually expand access to each other’s automobile markets. Agriculture remains more sensitive: for several products there are exceptions, restrictions, or transition arrangements.
In Southeast Asia, Brussels meanwhile deliberately opts for separate agreements. Free trade agreements with Singapore and Vietnam are already in force. Negotiations with Indonesia have been completed, while talks with Thailand and Malaysia continue.
ASEAN
This bilateral approach followed after negotiations on a single free trade agreement between the EU and ASEAN stalled. Brussels and ASEAN began talks on this in 2007 but these were halted in 2009. Major differences between the economies of the ASEAN countries make joint agreements difficult.
European social, labor, and environmental standards also pose an obstacle especially for less developed ASEAN countries. Yet European businesses continue to push for an overarching economic framework. This could eventually allow the individual agreements to develop into a much broader trade relationship between Europe and Southeast Asia.