The EU-Asean Commemorative Summit reflects the increased geo-economic strategic significance of the Southeast Asian region, as the EU’s vision towards the Indo-Pacific region is growing in terms of economic, demographic, and political weight, which makes it an essential player to address current global challenges. This has been ensured by the EU’s chief diplomat HR/VP Josep Borrell, highlighting that “the importance of ASEAN needs to be enhanced”.
The EU-ASEAN Plan of Action 2023-2027 of August 2022, serves as one of the main cornerstones of their bilateral cooperation. It aims to increase the level of engagement between the 27 EU member states and the 10 Southeast Asian nations across a wide range of areas, including sustainable trade and investment, crisis and disaster management, maritime security, counter-terrorism and economic recovery. In addition, ASEAN’s financial enhancement with the EU is another field with great prospects of greater bilateral cooperation.
Post-pandemic recovery, as well as the political and security infrastructure in the region are priorities high on the agendas of both blocs, especially as the situation in Myanmar and other security challenges (such as Afghanistan and the war in Ukraine) have proven to be “difficult riddles” to solve for politicians across the Indo-Pacific and beyond. As such, with the action plan, the two regions are set to further explore potential areas of collaboration, addressing key priorities within their individual Indo-Pacific Outlook.
Moving forward, challenges in reaching inter-bloc agreements persist. In order for negotiations and cooperation to be pursued in a friendly, constructive and mutually beneficial manner, differences in understanding and use of language will need to be further addressed. For instance, with the EU promoting a value-based external policy approach and ASEAN rather adhering to the fundamental principle of non-interference, these are not necessarily incompatible. Yet they need to be taken into consideration in the context of dialogues and joint plans of action. The key remains to find common interests, approaches and specific fields or sectors to advance cooperation. In addition, there is a significant variance in the type and level of regional integration and institutionalisation between the EU and ASEAN, which translates into financial, capacity and structural differences between the two organisations that should not be disregarded.
The EU-ASEAN Commemorative Summit
This year marked 45 years of diplomatic relations between the European Union (EU) and the Association of Southeast Asian Nations (ASEAN). At the first-ever EU-ASEAN Summit, which took place in Brussels on 14 December 2022, the leaders of both regions reaffirmed their Strategic Partnership, established in 2020, and set out common priorities that will bring the two regions closer together in the coming years. The first inter-blocs’ summit in Brussels reaffirmed ASEAN Centrality, enabling ASEAN to deepen relations with major powers at the central regional level. At the same time, the EU’s focus on the region is in line with its Indo-Pacific Strategy.
Compared to other great powers like the US, China, Japan, and South Korea, the EU is a relative latecomer to the party, as it has long not prioritised ASEAN in its external actions. Hence, the EU’s renewed focus on the region and ASEAN Centrality is noteworthy and marks a new chapter in their relations. The EU-ASEAN Commemorative Summit in Brussels reaffirms this engagement, while it will need to be translated into more concrete actions. The summit’s Joint Statement will therefore serve as a blueprint for their future cooperation, and can be considered as an achievement in itself.
Economics and Trade
The EU and ASEAN are one another’s third largest trading partners. For ASEAN, the EU is an important trading partner since the share of EU-ASEAN trade accounts for 10.6% of the overall ASEAN trade. ASEAN has increasingly gained a trade surplus with the EU of respectively 40.2, 51.1, and 56.6 bn EUR between 2019 and 2021. ASEAN is the third largest economy in Asia and the fifth largest economy in the world, with an overall population of 665 million, of which 34% are young people under 34..
Over the past decades, ASEAN has positively experienced rapid growth in terms of economic and financial stability. This labels ASEAN as a “rising star” among the world’s economies. To this end, having a Free Trade Agreement (FTA) with ASEAN will be vital for the EU to enhance trade and investment. This particularly as some of the major powers and ASEAN have concluded the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade deal. Additionally, the US has its US-ASEAN Trade and Investment Facilitation, a framework to establish dialogue on trade and investment issues. Therefore, the EU needs to consider maintaining its competitive position in the region through boosting trade and investment ties with ASEAN. One way to do this is to accelerate the resumption of bilateral FTA negotiations with the ASEAN Member States, and eventually the inter-bloc FTA negotiations, catching up with other players in the Indo-Pacific, which is the new engine of the global economy. As the European Commission’s 2nd Annual Report on the Implementation and Enforcement of EU Trade Agreements report shows, the EU’s preferential trade deals can increase the EU’s export value, which surpasses 1 trillion Euro, and grew more than 16% between 2020-2021.
Currently, the EU already holds FTAs with Singapore (2019), while it has also established a Free Trade Agreement and an Investment Protection Agreement with Vietnam (2019), seeking to expand such efforts with other countries in the region. Meanwhile, the FTA with Indonesia remains under negotiation. In the long-term, the EU still seeks to establish a “region-to-region” FTA, as reflected in the Summit’s joint statement, in which the leaders “reaffirmed a future EU-ASEAN FTA as a common long-term objective”.
The negotiations on the much anticipated EU-ASEAN FTA started in 2007, but were then paused in 2009 after bearing too little progress at the region-to-region level. Disagreements over which business sectors to include in the FTA, as well as institutional differences between the EU and ASEAN and other stumbling blocks halted the negotiations. Despite their similarities and willingness to cooperate, both regional blocs differ in their level of regional integration and in their vision of the world, often failing to speak the same language. However, ASEAN plans to resume the FTA negotiations with the EU, as the Southeast Asian bloc has worked to improve trade standards, especially in terms of environmental protection and labour rights, as set out in the New Generation of EU FTAs aiming to foster sustainable development in line with the UN’s SDGs.
Alongside the Summit, the EU also signed “Partnership and Cooperation Agreements” (PCAs) with Thailand and Malaysia, allowing for a greater scope of mutually beneficial bilateral political and economic cooperation. The EU already has PCAs in place with Indonesia, Vietnam, the Philippines and Singapore. Overall, this occasion projects six ASEAN Member States to have finalised PCA negotiations with the EU. The PCAs will enter into force once ratified by the EU member states, and Thailand and Malaysia respectively. Not wasting the momentum, the PCAs could potentially also accelerate FTA negotiations with both Bangkok and Kuala Lumpur in the near future. While awaiting the inter-bloc FTA, the EU and individual ASEAN member states should push for further expansion, adaptation and implementation of FTAs and other cooperation in trade in order to reap economic gains at a much faster pace.
Energy Cooperation and Digital Connectivity
The Summit also gave rise to the EU and Vietnam successfully agreeing on a Just Energy Transition Partnership (JETP), alongside the UK, the US, Canada and Japan. Vietnam thus became the third country to finalise a JETP with the EU as a party. The agreement allows Vietnam to receive 15.5 billion USD, comprising both private and public financing, as support for the country’s transition from fossil fuels to clean energy over the next 3-5 years. Ultimately, it will support Hanoi to achieve its Net Zero 2050 goal. Other JETPs the EU has in place are the one with South Africa (in which the US and the UK are also parties) and Indonesia (which was also signed by the US, the UK, Japan and Canada).
In an effort to tackle the challenges posed by climate change and the ongoing energy crisis, the leaders agreed to establish the EU-ASEAN Energy Dialogue. This framework will allow for closer coordination between the two regions on energy-related matters. More specifically, it will be used as a platform to bring the two regions together on a regular basis to exchange experiences on energy developments and reforms in support of a clean and just energy transition across Southeast Asia. As the joint statement indicated, the EU and ASEAN have agreed to promote enhanced cooperation for a more sustainable and inclusive energy transition, and the implementation of green technologies.
The EU and Singapore also expanded their partnership into the digital realm as they announced their Digital Partnership, seeking to provide a common framework to strengthen digital trade and connectivity. In the endeavours of boosting infrastructure in the region, the EU has already announced that it will deploy 10 billion euro worth of infrastructure investments in the ASEAN region through the EU’s “Global Gateway” programme. In the region, the Global Gateway initiative aims to assist South-East Asia in its green transition, based on the “Sustainable Connectivity Initiative” and the “Green Team Europe Initiative”. Green energy projects, digital connectivity, education and climate are at the forefront of both initiatives, achieving greater employment opportunities and promoting green finance.
Organised jointly by the EU-ASEAN Young Leaders Forum, the Young Indo-Pacific Forum and the Youth Sounding Board, the first ever EU-ASEAN Youth Summit was held in Brussels alongside the EU-ASEAN Leaders’ Summit. Emphasising youth participation in global politics, a selection of young people from both the EU and ASEAN were called to communicate the views and concerns shared by the two regions’ youth. Specific concerns voiced regarded matters of trade, human rights, hybrid threats, security in the Indo-Pacific, digitalisation and climate. Democratic governance and Covid-19 mitigation were also set high on the agenda. The spotlight was given to People-to-People connectivity and how to actively engage younger generations by enhancing opportunities in higher education and related exchanges, democracy and human rights discussions, as well as climate change mitigation tactics. Since 2022 was labelled the Year of Youth in both regions, young people are recognised to actively contribute to a more sustainable, inclusive and peaceful future.
EU and ASEAN youth put forward suggestions regarding Democratic Governance, Security in the Indo-Pacific, Future FTAs, Covid-19 mitigation, Implementation of the Paris Agreement regarding climate change and EU-ASEAN People-to-People Connectivity. Their conclusions were presented to the EU-ASEAN Leaders’ Summit, adding on the importance of the initiative.
The EU-ASEAN Youth Forum was positively evaluated and is expected to be expanded into an annual event, increasing the space for young people to make their voices heard and actively participate in inter-regional policy debates. They thereby aim to promote youth leadership between the two regions and raise awareness in a variety of fields standing at the core of EU-ASEAN cooperation, including human rights, democracy, climate change mitigation, digitalisation, as well as traditional and non-traditional security threats. In addition, encouraging exchanges between young people and researchers, aims to advance technological developments, enhance innovation and exchange of good practices.
Remaining Challenges to be addressed
While the EU-ASEAN Commemorative Summit marked an important turn in the relations between the two regional blocs, challenges remain. If the EU and ASEAN wish to meaningfully advance their cooperation, both partners will need to be flexible and respect each other’s differences in culture, understanding and external policy approaches. There is great potential for the two to strengthen their relations in trade, climate and green infrastructure cooperation. An inter-block FTA is rightfully to remain the long-term goal in their relations, since it would be a mutually profitable agreement which would bolster their cooperation and boost trade. Challenges related to this goal still exist, but an agreement could be reached in the not-so-distant future. The political will and determination are present in the discussions, highlighting the significance of the EU-ASEAN Summit. After all, their commitments on climate change and infrastructure have been reaffirmed and expanded, also by means of the EU’s Global Gateway. From now on, it is up to the representatives of the two blocs to turn their words into deeds and enhance their bilateral cooperation in concrete actions.
Authors: Simmi Saini, EIAS Junior Researcher; Eirini Boulia, EIAS Junior Researcher; Jutaporn Singchum, EIAS Junior Researcher; and Lin Goethals, EIAS Director
Photo credits: Pixabay