The EU-ASEAN Business Council, the main trade body for European businesses in ASEAN, released its 8th business climate survey during the Council’s trade and investment mission to Indonesia on September 1.

Key highlights from this year’s survey include: 63% of respondents view ASEAN as the region with the greatest economic opportunities (2021 – 63%); 69% of respondents expect ASEAN markets to become more important in terms of global revenue over the next two years (2021 – 58%); Only 6% of respondents believe that ASEAN economic integration is progressing fast enough (2021 – 2%); 81% of respondents believe non-tariff barriers to trade in ASEAN are not decreasing (2021 – 97%), while 23% say they are increasing (2021 – 38%); Only 9% of respondents believe ASEAN can implement circular economy concepts, while less than half believe ASEAN is serious about achieving its sustainability goals; 97% of respondents would like the EU to speed up FTA negotiations with ASEAN and its members (2021 – 98%); 73% of respondents believe that the EU should conclude a region-to-region FTA with ASEAN now (2021 – 49%).

Commenting on the survey results, Martin Hayes, President of EU-ABC, said: “This year’s survey demonstrates that European business sentiments towards ASEAN remain strong, perhaps stronger than ever. . Optimism about economic recovery in the region is also strong, despite continued concerns about geopolitical tensions and supply chain bottlenecks.”

“However, this good news for Asean is tempered by lingering concerns about the lack of action to remove non-tariff barriers to trade, the slow pace of trade deal negotiations with the EU and the need to make more for climate action. The latter is vital if ASEAN is to continue to attract foreign direct investment at the record levels it has achieved in recent years,” he continued.

Speaking in more detail about the survey results, Noel Clehane, Global Head of Regulatory and Public Policy at BDO, Chair of the European Services Forum and EU-ABC Board Member, said: “As European businesses react to the lessons of the pandemic and the ongoing geopolitical tensions in the Indo-Pacific, there are huge opportunities for ASEAN countries to benefit from the continued diversification of supply chains from these companies and future planned FDI – regional (EU-Asean) and intra-regional (within ASEAN) trade and investment. great potential, both of European and Asean origin, but particularly for medium and intermediate-sized companies. SME-SMI.”

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This year’s survey saw the perception of Asean as the region offering the best economic opportunities improve with the gap to the second-best location, China, widening significantly. The survey notes that the enthusiasm of European companies to expand their business in ASEAN remains strong, while also noting disappointment with the lack of progress in ASEAN regional economic integration, with only one in 10 respondents believing that the objectives of the ASEAN Economic Community have been achieved. The survey also highlighted the need for Asean to do more to address environmental and sustainability issues, including greening supply chains.

Chris Humphrey, Executive Director of EU-ABC, said: “Despite continued pressure from the private sector within ASEAN and repeated ASEAN calls for action, the fact that 81% of our respondents do not perceive a decrease in non-tariff cost barriers to trade, demonstrates a persistent failure of ASEAN in this area. Removing these barriers will only promote innovation, stimulate competition, stimulate economies and lower trade In an era of rising inflation and supply chain disruptions, it is essential that more meaningful steps to eliminate non-tariff barriers are taken and appear to have been taken.”

Regarding the development of trade agreements between the EU and ASEAN, Humphrey finally said: “Our respondents this year are sending a clear signal to both the EU and ASEAN: they want more trade agreements, and they want them now.”