By Wendy Laursen 2015-07-22 21:56:31
European investors are looking to ASEAN countries after the Greek crisis and slowed growth in China have reduced market stability.
“There’s now a moment where companies realize there’s Asia beyond China,” said Michael Pulch, the European Union’s ambassador to Singapore in a recent interview.
The E.U., the world’s largest economy, is already ASEAN’s second most important trading partner after China, accounting for 13 percent of ASEAN’s trade in goods with the world.
Singapore is the E.U.’s most important trading partner in ASEAN, accounting for 25.1 percent of ASEAN-E.U. trade in goods. Malaysia is second, with 18.8 percent of trade, followed by Thailand and Vietnam with 17.3 percent and 15.8 percent respectively.
Pulch says that the E.U. is seeking to boost cooperation with ASEAN countries, and he believes that maritime transport and aviation are areas of potential expansion.
However, there are challenges to further trade developments, according to a position paper launched this month by the E.U.-ASEAN Business Council. The paper recommends ways to increase trade and investment between Europe and ASEAN countries. Top of the list is the elimination of non-tariff barriers to trade. The paper highlights a number of market access issues across ASEAN, including:
1. Cumbersome customs procedures with little harmonization across ASEAN;
2. Unpredictable application of regulations and procedures, impacting the ability of businesses to make informed long term investment decisions;
3. Restrictions on foreign ownership and foreign competition;
4. Lack of harmonized standards or the lack of mutual recognition of such standards across the region.
These four broad themes limit the ability of businesses, from ASEAN or elsewhere, to trade effectively with partners across South East Asia. They also limit the ability of businesses to make long term investment decisions, states the report.