MORE than half of European businesses surveyed see ASEAN as providing the best economic opportunities over the next five years, the European Union-ASEAN Business Council (EU-ABC) said.
In EU-ABC’s 10th EU-ASEAN Business Sentiment Survey, 61% of the 399 respondents singled out the region as the source of the best economic opportunities.
“Over the 10 years that the Council has conducted the survey, our respondents regularly report that ASEAN is the region of best economic opportunity, and they see it as a region where they intend to increase investment and trade,” EU-ABC Chairman Jens Rübbert said in the report.
The survey found that 86% of respondents expect the level of their trade and investment in the ASEAN market to increase over the period and believe that ASEAN economic integration is important to the success of their business in the region.
“What is harkening is that many of our respondents are showing an inclination to expand their operations in the region, with high numbers reporting an intent to do so in Indonesia and Thailand in particular,” said Mr. Rübbert.
The survey showed that 76% of the European firms expressed a strong sentiment to expand in Indonesia, while 70% said that they might expand in Thailand.
In the Philippines, around 60% of the respondents said that they may expand, surpassing the results for Brunei, Cambodia, Laos, and Myanmar.
“While our respondents report a high level of importance for ASEAN’s regional economic integration plans to their business operations, it is also clear from the results that they have little or no faith in ASEAN’s ability to deliver fully on those plans,” the EU-ABC official said.
In the survey, 88% of the respondents said that there are too many barriers to the efficient use of the supply chain in the region, from only 72% of 599 respondents saying the same last year.
Some 40% of European businesses also cited increasing non-tariff barriers to trade in the region, a big jump from only 8% last year.
Meanwhile, only 2% of the respondents said that customs procedures in the ASEAN region are speedy and efficient.
In terms of trade agreements, 88% of the European businesses said that a region-to-region free trade agreement (FTA) will deliver more advantages than a series of bilateral FTAs. The same number said that they are at a disadvantage due to the lack of region-to-region FTAs.
“The continued absence of a region-to-region FTA between the EU and ASEAN is perceived as a disadvantage, emphasizing the importance of stronger, more proactive engagement from the EU to ensure that European businesses can thrive in ASEAN’s dynamic markets,” EU-ABC said.
It added that to realize the potential in the ASEAN market, ASEAN policymakers must work on removing existing barriers, enhancing economic integration, and forging stronger ties with the EU through comprehensive trade agreements. — Justine Irish D. Tabile