ASEAN SEEN AS REGION OF BEST ECONOMIC OPPORTUNITY BUT NEEDS TO ACCELERATE WORK ON ELIMINATION OF BARRIERS TO TRADE
EUROPEAN BUSINESS ALSO URGE EU-ASEAN INVESTMENT PROTECTION AGREEMENT AND ACCELERATION OF TRADE DEALS
Singapore – 1 September: The EU-ASEAN Business Council, the primary business body for European businesses in ASEAN, today published its 7th Business Sentiment Survey. Key highlights of this year’s survey include:
- 63% of respondents see ASEAN as the region with the best economic opportunity (2020– 53%).
- 82% of respondents expect to expand current levels of trade and investment in ASEAN in the next 5 years (2020 – 73%).
- 2% of respondents feel that ASEAN Economic Integration is progressing fast enough (2020– 2%)
- 3% of respondents believe that non-tariff barriers to trade in ASEAN are decreasing (2020 – 14%), whilst 38% say they are increasing (2020 – 27%)
- 81% of respondents say that there are too many barriers to the efficient use of supply of chains in ASEAN (2020 – 62%)
- 98% of respondents would like the EU to accelerate FTA negotiations with ASEAN and its members (2020 – 98%).
- 60% of respondents believe that the EU should pursue a region-to-region Investment Protection Agreement with ASEAN
Commenting on the Survey outcomes, Donald Kanak, Chairman of the EU-ABC said: “This year’s Survey shows that European business confidence in ASEAN trade and investment opportunities has rebounded to 2019 levels, but it also highlights a strong perception that the region is falling short in reducing barriers to trade. Almost 9 out of 10 respondents said that they would increase use of regional supply chains if trade was made easier. That in turn would bring investment, technology and jobs of the future, boosting economic recovery. ASEAN can make the best of ‘the power of 10’ through renewed leadership and concerted efforts to reduce trade barriers and deliver on the vision of the ASEAN Economic Community.”
Speaking further about the outcomes in the Survey, Noel Clehane, Global Head of Regulatory & Public Policy at BDO, Chairman of the European Services Forum and Member of the EU-ABC Executive Board said: “It is essential that the impediments to inter-regional (EU-ASEAN) and intra-regional (within ASEAN) trade and investment be addressed and eliminated if gains are to be seen by both blocs. This is very important for all businesses but particularly so for midmarket and SMEs businesses, both of European and ASEAN origin.”
This year’s Survey again asked respondents about their intentions on using regional supply chains and the possibility of supply chain relocation. Nearly 9 out of 10 respondents said that they would increase use of regional supply chains if barriers to trade were reduced. Somewhat alarmingly for the region, nearly half of respondents reported that they either had, or were considering, moving their ASEAN based supply chains.
Chris Humphrey, Executive Director of the EU-ABC commented: “The fact that our respondents would use regional supply chains more if barriers to trade were reduced is a huge incentive for ASEAN to take faster and more concrete action on the elimination of non-tariff barriers. Unfortunately, our Survey shows that European businesses do not perceive this happening. The Council urges ASEAN Leaders to redouble their efforts to implement in full the vision of an ASEAN Economic Community.”
On the development of trade deals between the EU and ASEAN, Chris Humphrey said: “there appears to be a shift in thinking from our respondents this year, away from pressing for a full-blown region-to-region FTA, towards taking smaller steps in the development of the ASEAN-EU trade and investment relationship. 6 out of 10 of our respondents are now calling for a region-to-region Investment Protection Agreement to be negotiated first, perhaps reflecting the realisation that working out an FTA is indeed a difficult task to undertake. However, calls to accelerate talks on bilateral FTAs remain as strong as ever.”
View the full list of EU-ABC publications here.