15:18 | 08/10/2020 Cooperation
(VEN) ASEAN still seen as the region of best economic opportunity, declining positive sentiment towards ASEAN reported however concerns over trade facilitation issues to the fore.
The EU-ASEAN Business Council, the primary business body for European businesses in ASEAN, today published its 6th Business Sentiment Survey. Key highlights of this year’s survey include:
Commenting on the Survey, Donald Kanak, Chairman of the EU-ASEAN Business Council said: “This year’s survey confirms that ASEAN is still seen as the region of best economic opportunity, but as would be expected during the COVID-19 crisis, the outlook for increased trade and investment shows signs of softening.”
This year’s survey asked which regions in the post-COVID-19 era would be candidates to attract more investment on supply chains. While ASEAN received the most votes, others such as Europe and China also received many. Mr Kanak continued: “Almost half expect supply chains to be reorganised following COVID-19. That makes the unfinished business on the ASEAN economic integration and progress on trade facilitation crucial to ASEAN’s sustainable recovery from the economic downturn.”
Executive Director of the EU-ASEAN Business Council, Chris Humphrey, added: “The message from the Survey is clear: ASEAN Economic Integration appears to be at a standstill. ASEAN and its constituents need to pick up the pace to meet the AEC Blueprint 2025 goals. European businesses are now adjusting their business strategy according to local environments, rather than waiting for substantial progress in regional economic integration.
European businesses are also very concerned about the lack of progress on further FTAs with the ASEAN region, and in particular the long talked about region-to-region FTA which 8 out of 10 see as potentially delivering more benefits that a series of bilateral FTAs. European businesses clearly want the European Commission to step up the pace of negotiations and engagement with Southeast Asia”.
2020 Key Findings
Current Business Environment and Outlook
73% of respondents expect to expand current levels of trade and investment in ASEAN in the next 5 years (2019 – 84%).
39% of respondents project an increase in ASEAN profits in 2020 (2019 –60%).
53% of respondents see ASEAN as the region with the best economic opportunity (2019– 63%).
COVID-19 Impact: ASEAN is not the only location being considered for supply chain relocations
47% of respondents are considering reorganising supply chains moving forward
Regions/countries receiving the most votes as possible future sources of more supply: ASEAN (34%), Europe (20%) and China (17%)
98% of respondents would like the EU to accelerate FTA negotiations with ASEAN and its members (2019 – 96%).
81% of respondents believe that an EU-ASEAN FTA would deliver more advantages than a series of bilateral FTAs (2019 – 78%).
71% of respondents believe the EU should pursue an EU-ASEAN FTA now before bilateral FTAs are concluded (2019 – 67%).
ASEAN Regional and Domestic Policy Frameworks
Only 2% of respondents feel that ASEAN Economic Integration is progressing fast enough (2019 – 6%).
Only 14% of respondents found that the number of NTBs to trade in ASEAN have decreased (2019 – 17%).
Only 4% of respondents find ASEAN customs procedures speedy and efficient (2019 – 8%).
62% of respondents that use supply chains reported facing many barriers to the efficient use of supply chains in ASEAN (2019 - 78%).
Government Consultation and Competition Issues
50% of respondents feel they are often or sometimes consulted by national governments in ASEAN (2019 – 74%).
36% of respondents believe they face unfair competition in the local/regional environment at least occasionally (2019 – 70%).
25% of respondents feel that there is adequate EU engagement (2019 – 39%).