European firms eye further expansion in Southeast Asia

European businesses are planning to expand their investment and operations in ASEAN as the  region  grows  in  global  importance  and  ASEAN  profits  increase, according to the second annual EU-ASEAN Business Sentiment Survey, which polled more than 200 executives from European companies around Southeast Asia.

European  businesses  are  bullish  on  ASEAN  and  are staking  more  capital  and  resources  on  the  region’s coninued  growth—almost  two-thirds  (60%)  of  respondents  are  planning  to  expand  in  the  region  and  a  further  31%  say  they  will  at  least  maintain  their current level of operaions. Only 4% are planning to contract.  

Nearly three-quarters (74%) of European businesses project a rise in ASEAN profits for 2016 and almost three-quarters (74%) expect ASEAN’s importance to global revenues to increase over the next five years. Around 85%  are  planning  to increase  their  regional  trade  and  investment. By  contrast,  less  than  half  of  European companies in China are planning to expand.

European  businesses  in  the  region  are  also keen  to  see  strengthened  ties  between  the  EU and ASEAN. Almost  two-thirds (66%) of European companies  want  a  European  region-to-region FTA  with  ASEAN,  and  more  than  half (58%) feel  they  are  at  a competitive  disadvantage without an EU-ASEAN FTA.

However,  policy  challenges  for  businesses  still  remain,  impeding  ASEAN  from  reaching its maximum economic potential — more than half (52%) of European businesses say that trade barriers are hampering supply chain efficiency.

ASEAN  Business  Council  is  calling  for  the  acceleration  of  the  process for  an  EU - ASEAN FTA and for  a speedier  conclusion to  existing  bilateral FTA negotiations; more frequent and regular interactions between EU and ASEAN governments and the private sector; and continued progress on trade liberalization among ASEAN member states and with their external trading partners.