European business has sounded an upbeat note on the ASEAN trading outlook and is leading calls for the acceleration in negotiation of free trade agreements between EU and ASEAN countries.
Calling for a region-to-region FTA with ASEAN the EU-ASEAN Business Council, announced the release of the 2017 EU-ASEAN Business Sentiment Survey.
The third annual EU-ASEAN Business Sentiment Survey, which polled more than 300 executives from European companies around Southeast Asia aims to serve as a barometer for the business sentiment and outlook of European businesses in Southeast Asia. It finds that European businesses continue to have a very positive outlook in Southeast Asia and expect to see ASEAN profits increase.
Commenting on the results, EU-ABC chairman, Donald Kanak said: “ASEAN is becoming the next key driver of global economic growth. This Survey shows that European businesses will continue to contribute to ASEAN by increased trade, investment and employment. Respondents strongly support a deep and comprehensive a region-to-region EU-ASEAN FTA to enable greater European investment in the region and continued collaboration on reducing trade barriers and trade frictions.”
Key findings include:
Three-quarters (75%) of European businesses expect an increase in ASEAN profits for 2017 and almost three-quarters (71%) have said ASEAN has become more important in terms of global revenues over the last two years.
As a result, 94% of European businesses plan to expand or maintain their current levels of operations and headcount in the ASEAN region.
86% of them expecting their level of trade investment in ASEAN to increase over the next five years.
European businesses in the region are keen to see strengthened ties between the EU and ASEAN. More than four-fifths (88%) of European companies believe the EU should pursue a region-to-region Free Trade Agreement (FTA) with ASEAN, a significant increase on the 66% surveyed in 2016, and more than half (55%) feel they are at a disadvantage in ASEAN without an EU-ASEAN FTA.
However, challenges for businesses remain, impeding ASEAN from reaching its maximum economic potential – almost two-thirds (61%) of European businesses say that non-tariff barriers are hampering supply chain efficiency.
The survey also found that nearly three-quarters (71%) of respondents said that further ASEAN economic integration was important to their business success in the region, as compared to the 66% surveyed in 2016. It also reveals that European companies are generally perceived favourably in ASEAN, with only 12% saying they were viewed less favourably. The survey also assesses that there is no significant fall out from Brexit on trade and investment plans, with only 12% saying that it would affect their trade and investment plans.
Commenting on the survey, EU Ambassador to ASEAN, Francisco Fontan said: “I want to again thank and congratulate the EU-ABC for this new Business sentiment survey and for the excellent partnership with the EU Mission to ASEAN. It is precisely this strong support and active engagement of the EU business community in the ASEAN region that lay behind all our institutional efforts in the economic field.”
EU-ABC Executive Director, Chris Humphrey added: “The EU-ASEAN Business Council remains committed to working with the European Commission and ASEAN national governments, to achieve the reality of a high-quality, comprehensive region-to-region FTA and accelerate the negotiation of FTAs between the EU and ASEAN region. We will also continue to work closely with ASEAN and its Member States on promoting the further development of the ASEAN Economic Community.”