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ASEAN–European Union relations

Bilateral relations

  • 8 min read
  • 4 chapters

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Through European Union, ASEAN and Wood

Relations between the two regions are expanding, developing progressively on the economic, political, and cultural fronts. Dialogue between the two regions has been enhanced with numerous technical level meetings and bi-annual ministerial meetings. Whereas in the past, much of the Europe – Southeast Asia relationship has focused on Southeast Asian development, the focus of cooperation has transformed to an emphasis on diplomacy, where the two sides discuss regional and international problems, and finally to a new emphasis on non-traditional risks, and regional integration support.

Economic relations

The European Union and the Association of Southeast Asian Nations enjoy robust commercial relations. The EU is ASEAN's third largest trading partner, while ASEAN is the EU's fifth largest trading partner. Total trade in 2011 in goods and services amounted to $265 billion. ASEAN had a surplus of $25 billion in its trade with the EU. The EU is the biggest provider of foreign direct investment into ASEAN, 24% of the total.

Trade has increased significantly over the past decades. EU exports to ASEAN were estimated at €45.7 billion in 1997, up from €8.9 billion in 1987. EU imports from ASEAN were valued at €10 billion in 1987, and had already surged to €46 billion by 1997. The structure of EU–ASEAN trade has undergone significant changes. In the past, EU exports to ASEAN have included a higher percentage of manufactured products. As ASEAN transforms from a commodity-producing region to a supplier of manufactured goods, there has been a dramatic shift in ASEAN's exports to the EU, from primary products to manufactures. Hence, ASEAN's exports consisted mostly of raw materials, such as wood, manioc, rubber, and palm oil. Today, electronic equipment, textiles, and clothing account for a larger share of exports. Trade in services between the two regions has also grown in recent years.

In order to further improve trade between the two regions, and to speed up ASEAN's economic integration, there is a regular dialogue at ministerial level and ASEAN–EU Business Summits are held on a regular basis. The first ASEAN–EU Business Summit was organised in Jakarta in May 2011, followed by a second Business Summit in April 2012 in Phnom Penh, and third one in Hanoi in March 2013. These meetings of business leaders, including small and medium-sized enterprises, with ASEAN trade ministers and the EU Trade Commissioner, generate a host of recommendations for both parties to facilitate trade. In 2007, the council authorised the commission to start negotiating a free trade agreement (FTA) with ASEAN. FTA negotiations were launched at the ASEAN–EU Economic Ministers (AEM) Consultations held in Brunei Darussalam in the same year. However, trade talks were moving relatively slowly, and eventually ground to a halt in 2009. The failed ASEAN–EU FTA paved the way for bilateral FTAs and negotiating Partnership and Cooperation Agreements (PCA) with individual ASEAN member states. The EU has concluded a free trade agreement with Singapore in 2012, and is negotiating FTAs with several other ASEAN countries (Vietnam, Thailand, and Malaysia). With Malaysia, negotiations are well advanced. These agreements are stepping stones to an overarching region-to-region agreement between the EU and ASEAN.

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