December 6, 2024
JAKARTA – The latest European Union-Asean Business Sentiment Survey reveals that a record 59 percent of European businesses felt that the EU was not playing its part in supporting their interests in Southeast Asia. It was the highest level of dissatisfaction since the survey was launched in 2015.
It is not just the companies talking; speaking to ministers, senior officials, and policymakers across Southeast Asia as I regularly do, the EU is clearly missing key passes which other global players are all too eager to take possession of.
A case in point is the recent Asean Ministers on Energy Meeting in Vientiane, Laos, where most dialogue partners were present, but the EU was not, despite having much to offer in areas like energy transition and the development of a regional power grid. In short, the EU must get back in the game before it risks conceding ground to more active players.
Over the past decade of working on EU-Asean business relations, I can confidently say we have scored high in our trade and investment interactions with Asean. The free trade agreements (FTAs) have been sealed with Vietnam and Singapore, which also recently signed a digital trade agreement with the EU, while ongoing FTA negotiations with Indonesia, Thailand, and soon, the Philippines, are dribbling toward even stronger ties. It is clear that on the trade front, we are making great strides. We just have to keep up the momentum and advance this progress.
Meanwhile, the EU and Asean now share a strategic partnership, bolstered by a plan of action to bring it to life. On paper, it is an impressive game plan, highlighting many potential and actual areas of collaboration. Yet, much of the action remains under the radar, uncelebrated. That is a pity and a missed goal opportunity since Asean’s other dialogue partners are quick to trumpet their contributions to the region, even when they are smaller in comparison.
It should come as no surprise then that many of these countries enjoy a comprehensive strategic partnership with Asean, while the EU is left hoping for an upgrade in 2027 when both sides celebrate 50 years of bilateral relations.
Asean is central to the EU’s Indo-Pacific policy and the regional bloc has explicitly called for greater engagement with all its dialogue partners to balance geopolitical dynamics and drive a more just, equitable, and sustainable regional development.
Yet, despite these clear signals, the EU’s response has been lukewarm, creating a vacuum that is being filled by other global players, including Russia and China, that are more than willing to exploit the opportunities that come with deeper engagement.
The biggest concern for European businesses is the glaring lack of EU engagement at the highest levels in key areas. A European trade commissioner has not physically met their Asean counterparts in person since 2018, and that was the case again this year. Though travel restrictions during the pandemic was behind this, Asean’s other dialogue partners consistently show up at the ministerial level, especially on digital, health, agriculture, energy, transportation, customs, and financial services issues. Meanwhile, the EU is often only represented at senior officials’ level.
This leaves European businesses navigating the complexities of the Asean market without the high-level political support that their competitors enjoy. The lack of EU representation puts us at a distinct disadvantage; we miss out on the opportunity to influence regulations, standards, and policies that directly impact our regional operations.
It also sends a negative message: the EU is just not as committed to Asean as others. This has the potential to undo years of trust and good work that have been built. The EU’s slip in the recent State of Southeast Asia survey reflects this, potentially harming the long-term prospects of European businesses in the region.
There is still time for the EU to step up its play with Asean, but it requires more than just words on paper. Ministerial-level representation on energy issues would be a good start, with Europe sharing its winning strategies with Asean as the region develops its own power grid.
As Asean negotiates what would be the world’s first regional agreement on the digital economy, EU’s more active role in this should be as welcome.
Europe and Asean need each other as partners, just like soccer teammates who rely on close coordination. With a new European Commission, we can only hope it will strengthen its engagement with Asean in the future and see more European commissioners working side by side with their Asean counterparts. The Jakarta Post/Asia News Network
Chris Humphrey is executive director of the EU-ASEAN Business Council.
The Philippine Daily Inquirer is a member of the Asia News Network, an alliance of 22 media titles in the region.