EU- Asean free trade agreement RELOADED

This is good news for Southeast Asia and the EU. The first attempt to establish a FTA between Asean and EU dates back to 2007. In 2009, the negotiations stopped over a disagreement on Myanmar’s human rights situation.

Now, almost eight years later, new negotiations could be a chance to develop trade ties between the two regions further. The EU is currently Asean’s second-largest trading partner with total trade amounting to US$248 billion in 2014 and was Southeast Asia’s largest source of foreign direct investment in 2014 with $29.1 billion or 21.3 per cent of foreign inflows to the region. These numbers would expect to grow further.

A joint press release after the diplomatic gathering in Malaysia showed the importance the EU and Asean are giving to the new attempt of an FTA, but there is a sense of cautiousness in the air. Responsible for the trade negotiations from EU side is EU Trade Commissioner Cecilia Malmstrom. She clearly stressed that FTA negotiations must be ‘handled properly’. “It is important to have it right, we are waiting for the integration of Asean through the AEC [Asean Economic Community] to take place before the trade agreement.”

It is obvious that EU favours a step-by-step approach this time. While the situation in Burma is improving and a set of reforms were put in place, other problems occurred in the meantime over the last years. The EU is in difficult discussion with the US over a free-trade agreement, the so-called Transatlantic Trade and Investment Partnership (TTIP). This, maybe the biggest free-trade agreement currently negotiated, is faced with increased criticism by civil society and pressure groups on both sides of the Atlantic. The negotiations are resource intensive and seen as high priority for the new EU Juncker-Commission which resumed office only at the end of 2014.

Additionally, China is playing a crucial part in a potential new EU-Asean FTA. The situation in the South China Sea and the potential conflicts with some Asean member countries over this, like with the Philippines, could cast a shadow over the negotiations.

Another open question is how existing FTAs between EU and Asean member countries (Singapore 2012) will be introduced in the FTA and how the current EU FTA negotiations with Asean members Malaysia, Vietnam and Thailand will be affected. Already many aspects of these ongoing negotiations have proven to be difficult.

However, one thing becomes evident. The fact that no single country, but increasingly regional bodies are conducting trade negotiations from region to region, shows that the future of geopolitics and geopolitical trade increasingly lies with regional organisations and less on a country to country level. This is a lesson not only for Asean but also for the EU alike in which recent discussions and EU referendums in EU member countries are often playing on local patriotism without seeing the global chances and opportunities of strong regional bodies. 

 

Alexander Mohr, PhD, is partner for international relations at the government relations firm Alber & Geiger in Brussels and was a lecturer in international relations at the Institute d’etudes Politiques de Paris.