EU in Asia - ASEAN Relations

ASEAN, overview

The Association of South East Asian Nations (ASEAN) encompasses 10 South East Asian countries. Its key position in the Asia-Pacific region, its dedication to peace and stability in the region and its important economic weight have made ASEAN an essential partner for the European Union in Asia.

ASEAN was established on August 8, 1967 in Bangkok, Thailand, with the signature of the Bangkok Declaration by the five original member nations (Indonesia, Malaysia , Philippines, Singapore, and Thailand). In 1984, Brunei Darussalam was admitted as the sixth member. In 1995, Vietnam also joined ASEAN. Lao People's Democratic Republic and Burma/Myanmar became members in 1997. Cambodia joined in 1999.

The countries of South-East Asia have a total population of 544 million (one of the largest regional markets in the world), a total area of 4.5 million square kilometres, a combined gross domestic product of USD 737 billion, and an average per capita income of $1,266 (with large disparities between the ASEAN members ranging from $310 in Cambodia, through $4,198 in Malaysia, to $20,987 in Singapore)^1-Source. Three countries in the region (Burma/Myanmar, Cambodia, and Laos) are classified as Least-Developed Countries by the United Nations.

ASEAN’s efforts for regional integration have taken a deeper dimension since the 1990s, with the launch of ASEAN Free Trade Area (AFTA), an ASEAN Investment Area (AIA) and the Initiative for ASEAN Integration (IAI) and most lately, in 2003, the so-called Bali Concord II which envisages the creation of ASEAN Economic, Security and Social Cultural Communities by 2010.

ASEAN, a key partner for Europe

	On the eve of the 16th EC-ASEAN Joint Cooperation Committee meeting, Commissioner for External Relations and European Neighbourhood Policy, Benita Ferrero-Waldner (left) said: "EU relations with ASEAN are becoming increasingly dynamic: tomorrow's meeting, and in particular the adoption of the Vision Statement shows that our relationship is ready to shift up a gear". She added: "Europe has led the way in exploring the possibilities and advantages of regional integration. We applaud the initiatives that ASEAN is taking to bring the benefits of deeper regional co operation to South East Asia. We will continue to do all we can to support ASEAN in this to help bring greater stability and prosperity to the region."

The EU is a longstanding dialogue Partner of ASEAN. Co-operation between the EU and ASEAN is based on a Co-operation Agreement (1980) between the EC and member countries of ASEAN: Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. Protocols for the accession of Laos and Cambodia to the Agreement were signed in July 2000 but the EU has indicated that it cannot agree to negotiate an extension of this agreement to Burma/Myanmar as long as the situation as regards democracy and human rights in that country does not improve significantly. Burma/Myanmar, therefore cannot participate in EU-ASEAN co-operation actions.

In September 2001, the European Commission presented its Communication "Europe and Asia: A Strategic Framework for Enhanced Partnerships", which identified ASEAN as a key economic and political partner of the EC and emphasised its importance as a locomotive for overall relations between Europe and Asia.  

The Commission's Communication 'A New Partnership with South East Asia', presented in July 2003, reaffirms the importance of the EC-ASEAN partnership. To download more information, please click here (PDF - 595 KB). The strategic priorities identified in the Communication include: Supporting regional stability and the fight against terrorism; Human rights, democratic principles and good governance; Mainstreaming justice and home affairs issues; Injecting a new dynamism into regional trade and investment relations; Continuing to support the development of less prosperous countries; and Intensifying dialogue and co-operation in specific policy areas through READI, the Regional EU-ASEAN Dialogue Instrument.

The Council Conclusions from 2004 expressed that Member States' agreement with the overall strategy. They confirmed the EU’s interest in keeping the region stable and democratic and underlined the move away from relations only based on “aid and trade” and the emergence of a broad and modern political agenda.

Today, the implementation of the strategy continues, along the suggested lines, both regionally and bilaterally. The policy set out in the Communication remains the Commission agenda for relations with the region.

Political Dialogue

Political dialogue between the EU and ASEAN firstly takes place at regular Ministerial Meetings. The foreign ministers of both the EU and ASEAN have met for political dialogue every second year since 1978.

Since 1995 it has also been agreed that EU-ASEAN Senior Officials would meet at regular Senior Officials Meetings. However, the accession of Burma/Myanmar to ASEAN in 1997 put the political dialogue process on hold, until the April 2000 EU General Affairs Council approved an arrangement for the Burmese Foreign Minister to participate in EU-ASEAN Ministerial Meetings and announced a toughening of the EU Common Position on Burma/Myanmar.

Both parties also discuss political and security issues at the ASEAN Post Ministerial Conferences, which take place immediately after ASEAN’s annual ministerial meetings, and in the ASEAN Regional Forum, the only security forum in Asia. The EU is a full member of the ARF and is represented in its meetings by the EU Troika. The EU and ASEAN share an over-riding common goal, a commitment to regional peace and stability.

The 16th ASEAN-EU Ministerial Meeting was held in Nuremberg (Germany) on 14-15 March 2007. There was a shared perception that the EU and ASEAN, together representing around 1 billion people and committed to the same principles of regional and multilateral cooperation, had a very great potential to work together to address global challenges. Both sides welcomed the progress made in strengthening bilateral relations since formal relations were established 30 years ago. It was agreed by all that EU/ASEAN cooperation in the ACEH Monitoring Mission had given the relationship a new political vigour. The meeting discussed the progress made in the EC-ASEAN cooperation programmes, the negotiations of Partnership and Cooperation Agreements, the various sector dialogues between the two regions, and the strengthening of the economic relations. The ministers discussed regional developments in the EU and ASEAN and a range of international issues, including Iran, Iraq, the Middle East, Afghanistan, and North Korea. The meeting marked a step change in EU/ASEAN relations, reflecting a wish by both sides to increase engagement at a time when ASEAN accelerates the pace of its own integration and the EU seeks an enhanced role in South East Asia. A Joint Co-Chairman's Statement and the Nuremberg Declaration were adopted setting out a shared aspiration to boost cooperation further. This will be followed up by drafting a detailed Plan of Action.

Trade relations

The commercial and political connections between Europe and Southeast Asia go back centuries, and they are growing stronger in a globalised world. The growing role that Southeast Asia plays in global supply chains is demonstrated not only by the flow of goods imported to the EU, but also by the growing presence of European companies in the region.

Despite the impressive economic progress of Southeast Asian countries in recent years, the EU believes that there is a need for effective and targeted trade related assistance to boost and diversify trade within the ASEAN region. EU trade development assistance is used to reinforce regional integration, to reduce poverty and to promote economic development.

With the ASEAN Program for Regional Integration Support (APRIS) the EU aims to provide technical assistance for the ASEAN secretariat. The European Commission (EC) has also been looking to further reinforce and revitalise the EU’s political and economic relationship with ASEAN and launched the Trans-Regional EU-ASEAN Trade Initiative (TREATI) in 2003.

The focus of that initiative is on economic cooperation on a region-to-region basis involving dialogue and joint activities in areas of mutual economic interest. The goal is to establish a foundation, supporting dialogue and regulatory co-operation on various trade facilitation, market access, and investment issues between the two regions in order to expand trade and investment flows.

In total, the EU’s commitment to regional assistance programmes in Southeast Asia since 2000 amounts to about €80 million. To download more information on TREATI, please click here (43 KB-PDF).

As a region, ASEAN has benefited significantly from the EU’s Generalised System of Preferences (GSP). GSP operates on the rationale that by increasing trade, mostly by tariff preferences, developing countries can enhance their economic position.

Cambodia and Laos are currently also eligible for the Everything But Arms program (EBA). This is a special arrangement for the least-developed countries and provides the most favourable treatment of all, granting duty-free and quota-free access to the EU market (arms and munitions excluded).

EU-ASEAN trade relations are likely to intensify in the future, as a result of EU-ASEAN Free Trade Agreement (FTA) negotiations which were officially launched in May 2007. According to the Vision Group, established by Economic Ministers in 2005, reinforced partnership would be mutually beneficial and could also support the process of ASEAN integration. In order to maximise the benefit for all parties involved, the Vision Group recommended that an enhanced economic partnership between the EU and ASEAN should be based on an FTA in accordance with WTO rules and an expanded ASEAN-EU economic co-operation. Please click here to read the Report of the ASEAN-EU vision group (280 KB - PDF).

The EU is ASEAN’s 2nd largest overall trading partner after the United States and ahead of Japan and China. In fact the EU accounts for 11.7% of ASEAN’s total external trade, purchasing 12.9% of ASEAN’s exports and providing 10.3% of its imports.

In 2006 overall merchandise trade between ASEAN and the EU amounted to €126.6 billion. That is slightly less than EU trade with all of Latin America, but about 30% more than its trade with the Gulf Co-operation Council (GCC). Considering ASEAN as a single trading entity would give it a 5% share of the EU’s total external trade and put it in 5th place, ahead of Japan, among EU’s trade partners.

ASEAN’s trade with the EU has been expanding steadily over the past five years at an average annual growth rate of 4%. The trade balance has been in deficit for the EU, but quite stably at around €27 billion.

On a country level, the EU has a relatively high trade deficit with all developing ASEAN countries, whereas with Brunei it enjoys a trade surplus, and with Singapore its trade is balanced.

To download the figures on EU-ASEAN Trade in 2006, please click here (210 KB - PDF).

EU exports to ASEAN are concentrated in a few key sectors. Heading the list of most important product groups are machinery and transport equipment (55%), chemicals (13.6%) and manufactured goods (11.5%).

The EU’s imports from ASEAN are concentrated in the two main sectors of machinery and transport equipment (46.7%) and miscellaneous manufactured articles (20%).

Between 2002 and 2006 the EU’s Foreign Direct Investment inflows to ASEAN totalled more than €30 billion, accounting for 26.3% of FDI inflows to ASEAN, ahead of Japan, the ASEAN countries themselves and the USA.

In 2004 the EU Foreign Direct Investment stock in ASEAN stood at €69 billion. The stock in ASEAN has seen very strong growth in recent years, increasing more than threefold during the period 1994-2004. The largest part of EU FDI stock in ASEAN is concentrated in Singapore, followed by Thailand, Malaysia, Indonesia and the Philippines.

To read more on the EU bilateral trade relations with the individual ASEAN countries please click here.
 

EC-ASEAN Cooperation