EVOLVING TIES: It’s a golden opportunity to boost trade and investments between two of the world’s important groupings
TODAY, the Asean-European Union Consultations in Phnom Penh will set the stage to bring Asean and EU economic relations back on track and on to a higher plane.These relations hit a wall in 2009 when the Asean Economic Ministers and the EU Trade Commissioner agreed to halt their Free Trade Agreement negotiations. That was unfortunate.
The FTA had been envisaged to have been able to strengthen and deepen the region-to-region economic integration and help build regional capacity towards realising an Asean Economic Community by 2015. Indeed, this involvement would have provided an added dimension to the region- to-region collaboration and enriched the Asean process as well.
The FTA would also have added impetus to the EU’s technical assistance programmes under the Trans-Regional EU-Asean Trade Initiative and other economic integration initiatives. It would have facilitated Asean’s engagement with the EU in joint collaborations to further promote the growth of both the manufacturing and services industries. Likewise, it would have provided EU enterprise preferential access to one of the most dynamic regions in the world.
The negotiations sputtered not only because of the political realities at that time, but also underscored the fundamental differences between the parties then. Much has changed since that decision of 2009. As a group, Asean continues to experience positive developments on both the economic and political fronts.Its member states have made significant improvements in their trade and investment regimes through the Asean Trade in Goods Agreement and the Asean Comprehensive Investment Agreement.
These are all progressive steps towards the realisation of the Asean Economic Community.In light of global economic challenges, Asean’s work towards greater economic integration makes it increasingly attractive. Add to this the encouraging political developments in Myanmar and you have a value proposition you cannot ignore. Bluntly put, it is a no-brainer to increase one’s presence and engagement with the region.Make no mistake, the Europeans are playing catch-up as others have had a head start in the region.It is, for example, not included in the present engagement permutations between Asean and its other dialogue partners, whether it is the Plus 3, Plus 6, or even the Trans Pacific Partnership.It could help explain the renewed enthusiasm to see both parties back at the negotiating table.
For European businesses, a deeper Asean-EU economic relationship is an imperative.Global supply chain developments have resulted in increased EU investment and business activities in Asean in the recent past.But are they sufficient? In 2010, the EU was Asean’s third largest trading partner with exports to Asean amounting to US$115.1 billion (RM345.3 billion), and imports from Asean totalling US$92.7 billion.
This trade accounted for 9.97 per cent of Asean’s total global trade. Compare this with 11.09 per cent of Asean’s trade with China, 9.78 per cent with Japan and 4.71 per cent with Korea. EU investments in Asean amounted to US$16.98 billion while Asean investments in the EU totalled US$7.54 billion.These numbers are significant. But do they reflect the true potential of an evolving relationship?And so the stage is set for revisiting the prospect of a FTA between Asean and the EU. Those who would not learn from the lessons of history are condemned to repeat it.
It was a European who said that and so one hopes that the lessons learnt from 2009 should better prepare us for this re-engagement.
What is coming up is an opportunity to increase trade and investments between two of the world’s important groupings. And, in so doing, it should, and will, enrich the lives of over 1.3 billion citizens of this planet.
TODAY, the Asean-European Union Consultations in Phnom Penh will set the stage to bring Asean and EU economic relations back on track and on to a higher plane.These relations hit a wall in 2009 when the Asean Economic Ministers and the EU Trade Commissioner agreed to halt their Free Trade Agreement negotiations. That was unfortunate.
The FTA had been envisaged to have been able to strengthen and deepen the region-to-region economic integration and help build regional capacity towards realising an Asean Economic Community by 2015. Indeed, this involvement would have provided an added dimension to the region- to-region collaboration and enriched the Asean process as well.
The FTA would also have added impetus to the EU’s technical assistance programmes under the Trans-Regional EU-Asean Trade Initiative and other economic integration initiatives. It would have facilitated Asean’s engagement with the EU in joint collaborations to further promote the growth of both the manufacturing and services industries. Likewise, it would have provided EU enterprise preferential access to one of the most dynamic regions in the world.
The negotiations sputtered not only because of the political realities at that time, but also underscored the fundamental differences between the parties then. Much has changed since that decision of 2009. As a group, Asean continues to experience positive developments on both the economic and political fronts.Its member states have made significant improvements in their trade and investment regimes through the Asean Trade in Goods Agreement and the Asean Comprehensive Investment Agreement.
These are all progressive steps towards the realisation of the Asean Economic Community.In light of global economic challenges, Asean’s work towards greater economic integration makes it increasingly attractive. Add to this the encouraging political developments in Myanmar and you have a value proposition you cannot ignore. Bluntly put, it is a no-brainer to increase one’s presence and engagement with the region.Make no mistake, the Europeans are playing catch-up as others have had a head start in the region.It is, for example, not included in the present engagement permutations between Asean and its other dialogue partners, whether it is the Plus 3, Plus 6, or even the Trans Pacific Partnership.It could help explain the renewed enthusiasm to see both parties back at the negotiating table.
For European businesses, a deeper Asean-EU economic relationship is an imperative.Global supply chain developments have resulted in increased EU investment and business activities in Asean in the recent past.But are they sufficient? In 2010, the EU was Asean’s third largest trading partner with exports to Asean amounting to US$115.1 billion (RM345.3 billion), and imports from Asean totalling US$92.7 billion.
This trade accounted for 9.97 per cent of Asean’s total global trade. Compare this with 11.09 per cent of Asean’s trade with China, 9.78 per cent with Japan and 4.71 per cent with Korea. EU investments in Asean amounted to US$16.98 billion while Asean investments in the EU totalled US$7.54 billion.These numbers are significant. But do they reflect the true potential of an evolving relationship?And so the stage is set for revisiting the prospect of a FTA between Asean and the EU. Those who would not learn from the lessons of history are condemned to repeat it.
It was a European who said that and so one hopes that the lessons learnt from 2009 should better prepare us for this re-engagement.
What is coming up is an opportunity to increase trade and investments between two of the world’s important groupings. And, in so doing, it should, and will, enrich the lives of over 1.3 billion citizens of this planet.