Under the German Presidency of the Council of the European Union, Brussels tightened relations with ASEAN agreeing on a Strategic Partnership. Current trade agreements negotiations with several ASEAN countries and the EP push for a region-to-region FTA give a glimpse of EU multilateral agenda: will Brussels avail of this momentum and scale-up its relationship with all Asia-Pacific Countries?
Riccardo Pozzi is Head of EU Corporate Affairs at UTOPIA.
In the last decades, the Association of Southeast Asian Nations (ASEAN) has increased its centrality from both an economic and a geopolitical point of view. Today, 654 million people live in the States of the Asian Association, making it an attractive market for global powers. In 20 years, ASEAN GDP has risen from $ 600 billion to $ 3,000 billion; if this tremendous trend continues, its rapid growth will step up ASEAN purchasing power, allowing for a dramatic increase of trade flows. As of today, EU and ASEAN bilateral exchanges in goods per year are worth more than € 200 billion, confirming a solid positive trend.
The economic growth of South-East Asia has increased its importance as a commercial partner not only for Europe, but also for China and the US. However, its relevance widened also from a geopolitical point of view. A clear evidence is the recent signature of the Regional Comprehensive Economic Partnership (RCEP), involving ASEAN, Australia, China, India, Japan, New Zealand and the Republic of Korea, creating the largest trade agreement in the world. By signing the RCEP, ASEAN enhanced its negotiating position toward global powers, reinforcing global multilateralism and rules-based order and trade.
In Washington, the election of President Joe Biden will likely result in the reinforcement of the US-ASEAN relations, in strong opposition to the Chinese expansion in the region. Would it be the case, the EU has all the interest in pursuing the strengthening of cooperation with ASEAN and increase its economic and strategic partnership with the region, availing of the favourable momentum for multilateralism and rules-based trade to effectively enhance the commercial ties with ASEAN.
During the German Presidency of the Council, the EU focused on Asia-Pacific region, improving relations with ASEAN. In December 2020, the EU and ASEAN became strategic partners, building on principles as multilateralism and free trade to strengthen their bond. In addition, we cannot forget that that the FTA between the EU and Vietnam entered into force recently, eliminating duties on almost all goods traded between the two sides. The Portuguese Presidency is also currently pushing for a “Global Europe”, committing to “effective multilateralism and to the geopolitical positioning of the EU as a global player”.
In line with the Council, right after the in principle agreement on the EU – China Comprehensive Agreement on Investment (CAI), the European Parliament approved, during the January Plenary, a resolution on connectivity and EU-Asia relations, advocating for “a regional EU-ASEAN free trade agreement”. The idea of a regional Free Trade Agreement (FTA) between the EU and ASEAN is not new for the European Commission that started talks is 2007. However, negotiations were suspended in 2009 to pursue a strategy of bilateral FTAs with ASEAN countries.
Leveraging on trade agreements, the EU aims at developing its foreign policy agenda, becoming a reliable and attractive partner for ASEAN countries and using its soft power to gain influence in the area. Hence, a push in trade negotiations with Indonesia and the Philippines would come with no surprise. This could also pave the way for opening talks with other Countries. In the current difficult economic moment, both the EU and ASEAN would benefit from the increase of trade flows and cooperation to promote a sustainable and green growth, spread rules-based multilateralism, resulting in a much-needed win-win situation.