EU-ASEAN Business Council Publishes 2019 EU-ASEAN Business Sentiment Survey

• The EU-ASEAN
  Business Council published its fifth annual EU-ASEAN Business Sentiment Survey today
• European firms
  remain highly optimistic and committed to ASEAN and continue to see ASEAN as
  the region of best economic opportunity
• However, increasing
  sense that ASEAN Economic Integration is failing to deliver, with rising
  concerns over non-tariff barriers in Southeast Asia
• European
  firms also want faster progress on trade deals between the EU and ASEAN, with
  majority reporting that they feel at a competitive disadvantage without more
  deals.

SINGAPORE
– Media OutReach – 2 September 2019 – Following on from previous years,
the EU-ASEAN Business Council (EU-ABC) today published its annual EU-ASEAN
Business Sentiment Survey — the fifth edition of this report. Highlight
findings this year include:

• 53% of respondents see ASEAN as the region with
  the best economic opportunity, up from 51% in 2018.
• 88% of respondents expect to increase trade and
  investment in ASEAN in the next 5 years, an increase of 13% over 2018.
• But only 3% of respondents feel that ASEAN
  Economic Integration is progressing fast enough, down from 11% in 2018
• 58% of respondents found that the number of non-tariff
  barriers (NTBs) to trade in ASEAN have not changed much, despite various
  ASEAN-level commitments to eliminate NTBs.
• 94% of respondents would like the EU to accelerate
  FTA negotiations with ASEAN and its members.

Commenting
on the Survey, EU-ABC Chairman Donald Kanak said:

“European businesses are
extremely positive about ASEAN and have rated ASEAN as the region with the best
economic opportunity, ranking more than 2-to-1 over the next, China. Almost 9
of 10 expect to expand trade andinvestment in the next five years.”

“However, there is
also a clear message that European businesses are increasingly sceptical or negative
about the effects of regional ASEAN integration on their business prospects. Respondents
are now seeing local or national elements such as improvements in
infrastructure and the local economy as key drivers impacting their revenue and
profits. Unless ASEAN moves faster on its integration efforts, especially
removal of NTBs and harmonization of standards, it risks being seen as just a
“sum of the parts” of the 10 countries and not capturing the synergies and
greater economic and development benefits that an integrated community can
bring.”

Executive Director of the EU-ASEAN Business
Council, Chris Humphrey, added:

“The message from the Survey is clear: ASEAN
Economic Integration appears to be at a standstill. ASEAN and its constituents
need to pick up the pace to meet the AEC Blueprint 2025 goals. European
businesses are now adjusting their business strategy according to local
environments, rather than waiting for substantial progress in regional economic
integration.  European businesses are
also very concerned about the lack of progress on further FTAs with the ASEAN
region, and in particular the long talked about region-to-region FTA which nearly
three-quarters see as potentially delivering more benefits that a series of
bilateral FTAs.  European businesses
clearly want the European Commission to step up the pace of negotiations with
Southeast Asia”

The Survey notes that “delays in reducing NTBs
to trade and investment have dulled enthusiasm for the AEC” and that “the
EU FTAs with Singapore and Vietnam are steps in the right direction, but the
opportunity cost of overlooking a region-to-region FTA, or more speedy action
on further bilateral FTAs, is not to be taken lightly. European businesses
are also urging the European Commission to bolster its efforts in ASEAN, while
calling for the EU to revitalise its negotiations with the Southeast Asian bloc
and take smaller progressive steps if necessary.”