ASEAN businesses look to the EU

Southeast Asian countries increasingly focus on improving trade relations with Brussels

By Tommaso Magrini

ASEAN countries continue to strategically balance their delicate relationship with the two major economies of China and the United States. Private sector stakeholders continue to show a strong preference for balance. Compared to a year ago (26.5 percent), according to a Fulcrum report, a higher percentage of respondents opted for a neutral position, without taking sides (31.4 percent). When asked in the 2024 Survey about the choice of strategic alignment between China and the United States, the two countries are in relative parity, with China marginally winning the first preference of respondents (50.5 percent) over the United States (49.5 percent). That said, an analysis of the gap between private sector preferences (35.5 percent) and the overall ASEAN weighted average (32.6 percent) shows that companies are more supportive of China's growing economic influence than the United States. But the reality is that countries in the region see the search for third-party strategic partners as particularly strategic. In this regard, the EU still ranks first (chosen by 37.6 percent of respondents). In addition, the aspects that attract ASEAN private companies to the EU as their preferred strategic partner have strengthened. 31.7 percent of respondents cited the bloc as a responsible interlocutor that respects international law, up from 24.4 percent in the 2023 survey. In addition, 30.8 percent of respondents rate the EU positively, given its vast economic resources and strong political will to provide global leadership (the 2023 figure was 17.0 percent). In recent times, ASEAN countries are actively pursuing higher levels of economic engagement with the EU and vice versa. Among these developments is the prospect of Malaysia and the EU resuming talks on a free trade agreement, which broke down in 2012, and Thailand and the EU pushing to sign a free trade agreement in 2025.