SINGAPORE (Sept 2): While the European Union’s free trade agreements with Singapore and Vietnam are steps in the “right direction”, some European businesses say trade relationships with other Asean countries are seen to be restrictive.

According to a 2019 EU-Asean Business Sentiment Survey published today by the EU-Asean Business Council (EU-ABC), European businesses are seeing opportunities in Asean, but the region’s slow pace of integration is an increasing concern.

The survey notes that only 3% of respondents feel that Asean economic integration is progressing fast enough, down from 11% in 2018.

It highlights that 58% of respondents think that the number of non-tariff barriers (NTBs) to trade in Asean have not changed much, despite various Asean-level commitments to eliminate NTBs.

As a result, this has dulled enthusiasm for the Asean Economic Community (AEC).

“The message from the survey is clear: Asean Economic Integration appears to be at a standstill,” says Chris Humphrey, executive director of the EU-ABC in a statement today.

“ASEAN and its constituents need to pick up the pace to meet the AEC Blueprint 2025 goals,” he urges.

According to the survey, European businesses have rated Asean as the region with the best economic opportunity, ahead of China.

Almost nine of 10 expect to expand trade and investment in the region in the next five years, it adds.

“However, there is also a clear message that European businesses are increasingly sceptical or negative about the effects of regional Asean integration on their business prospects,” says Donald Kanak, chairman of EU-ABC.

“Unless Asean moves faster in removing NTBs and harmonization of standards, it risks being seen as just a sum of the parts of the 10 countries and not capturing the synergies and greater economic and development benefits that an integrated community can bring,” he adds.

According to the survey, 94% of respondents would like the EU to accelerate free trade agreement negotiations with Asean and its members.

It notes that 54% of respondents perceive they are at a competitive disadvantage without an EU-Asean FTA.

Moreover, 72% of respondents believe that an EU-Asean FTA would deliver more advantages than a series of bilateral FTAs.

In addition, 64% of respondents believe the EU should pursue an EU-Asean FTA now before bilateral FTAs are concluded.

The survey adds that European businesses are urging the European Commission to bolster its efforts in Asean.