The Commission’s Directorate-General for Trade’s unit covering Southeast Asia has an increasingly busy agenda as trade talks with ASEAN members intensify. Shortly after the 18th round of negotiations on the EU-Indonesia Comprehensive Economic Partnership Agreement (IEU CEPA) concluded in May, an inter-sessional was arranged in June, with the next full round scheduled in 1 – 5 July 2024 in Indonesia. Both sides had made the political aim of “concluding” talks by the end of 2024, and while this remains an aspirational target, the intensity of talks has certainly increased in the past few months. The 18th round saw some progress made on many chapters Small and Medium Enterprises (SMEs), dispute settlement, institutional and final provisions (IFP), transparency, good regulatory practices, and sustainable food system (SFS). This is in addition to previously closed chapters on customs and trade facilitation, trade remedies, economic cooperation and capacity building, technical barriers to trade (TBT), as well as sanitary and phytosanitary (SPS). However, issues on government procurement, state owned enterprises and trade and sustainable development remain challenging. According to a study by the Center for Strategic and International Studies (CSIS), the IEU CEPA has the potential to increase incomes by USD 2.8 billion for Indonesia and USD 2 billion for the European Union. Indonesian exports to the EU are estimated to increase by 57.76% and EU exports to Indonesia is projected to increase by 76.17%.  

Talks with Thailand have been proceeding relatively slower, with only three round of negotiations held since the official announcement of its restart in March 2023. The latest round, which took place from 17 – 21 June in Brussels, covered the full range of areas under the scope of the future agreement, with 20 negotiating groups meeting during the week, according to Thailand Chief Negotiator Chotima Iemsawasdikul, Director-General from the Trade Negotiations department from the Ministry of Commerce.  She said challenging issues that require further clarification include government procurement, competition and subsidies, trade and sustainable development, and energy and raw materials. Both sides aim to hold inter-sessional meetings from now until the next full round, scheduled for the week of 4 November in Bangkok. 

Meanwhile, the negotiations for a new EU-Singapore Digital Trade Agreement, which focuses on rules on the digital economy, are also said to be close to being concluded. The new DTA, which will complement the existing EU-Singapore FTA, focuses on digital trade rules such as data localisation, flows, and transfer, data privacy, cyber security, electronic invoicing, electronic payments, digital inclusion, single windows, standards and technical regulations, information sharing and spam. The agreement will nevertheless take time to obtain the approval of the Council and European Parliament.  

The first round of negotiations with Philippines for a new FTA are expected to commence “soon”, since the official announcement to restart negotiations were made in March 2024. Commission officials are keen to take advantage of the momentum and opportunity presented by pro-business President Marcos to advance the FTA but with other competing priorities, it remains to be seen how quickly the FTA can be negotiated. 

The last FTA of significance remaining is with Malaysia, which has been “on hold” since 2012 at the request of Malaysia, after seven rounds of negotiations. Relations between EU and Malaysia have remained terse due to the disagreements over palm oil, among other issues. However, the EU remains keen to restart talks and explore untapped opportunities in Malaysia, such as on semiconductors. Both sides also signed a Partnership and Cooperation Agreement in December 2022, which is currently undergoing ratification. Given the recent movement on FTAs with its other ASEAN neighbours, there might be enough motivation for Malaysia to reconsider its stance. Nevertheless, given the long impasse, a new negotiating mandate will be needed. 

ASEANcham-EU’s position

ASEANcham-EU remains supportive and committed to the efforts taken to conclude the EU-Indonesia CEPA, EU-Thailand FTA, EU-Philippines FTA, and EU-Singapore DTA, and likewise supports any efforts taken by both sides to restart the EU-Malaysia FTA. We believe that such agreements help to provide certainty to businesses, and instill confidence in traders and investors from both sides, ultimately benefiting ASEAN’s local economies and jobs.