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EU-Asean FTA pushed

business / Economy
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EU-Asean FTA pushed

More than 50 percent of European businesses surveyed for an annual study felt that the lack of a region-to-region free trade agreement (FTA) between the European Union and the Association of Southeast Asian Nations (Asean) put “the Philippines at a disadvantage,” the 2017 EU-Asean Business Sentiment Survey reported yesterday.

While other factors—such as expansion plans and expected profit increases—pointed to a rosy economic outlook for the Philippines, a good number of European investors felt they were “operating at a disadvantage” given the advances being made under an even larger trade deal, the Regional Comprehensive Economic Partnership.

The survey covered 333 senior executives across the Asean, of which 51 were based in the Philippines, according to proponents of the study. Of these respondents, 8 percent noted that the lack of an EU-Asean FTA put European firms “at a competitive disadvantage,” slightly higher than the general Asean average of 55 percent.

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Seven out of the 10 Asean countries reported scores that were either at par or higher than the Asean average, with Indonesia topping the list as 68 percent of investors said the absence of the regional FTA was a disadvantage.
Other than this, 61 percent of EU firms based in Asean also said non-tariff barriers were hampering supply chain efficiency.

Chris Humphrey, executive director of the EU-Asean Business Council, downplayed this, noting that the Philippines still had an advantage, saying “at least the Philippines is currently negotiating a bilateral FTA.” Of the Asean member states, only Singapore and Vietnam have concluded talks, while the Philippines and Indonesia are still in negotiations.

“While the EU is just beginning to restart the process of considering a region-to-region FTA with Asean, and is in the process of negotiating a series of bilateral FTAs, some of its main competitors (e.g. Japan, China, Korea) have put in place trade deals with the Asean and are engaged in active negotiations on an even larger trade deals,” the report read.

To recall, EU and Asean officials announced last March the plan to revive the region-to-region FTA amidst growing concerns of protectionism.

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TAGS: 2017 EU-Asean Business Sentiment Survey, Association of Southeast Asian Nations (Asean), European businesses, European Union, free trade agreement (FTA)
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