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Asean to become more important in terms of worldwide revenues: EU businesses

Elysia Tan
Published Thu, Sep 1, 2022 · 03:56 PM

MORE European businesses today expect Asean markets to become more important in terms of worldwide revenues over the next 2 years, according to a recent survey conducted by the EU-Asean Business Council.

The council, a business body which promotes the interests of European businesses operating within Asean, found in the eighth edition of its annual Business Sentiment Survey that 69 per cent of respondents expressed this expectation, up from 58 per cent in 2021.

Also up from a year ago (49 per cent), 73 per cent of respondents believe that the European Union (EU) should pursue a region-to-region free trade agreement with Asean now, it noted in a Thursday (Sep 1) press statement.

Unchanged from the previous year, close to two-thirds – 63 per cent – of respondents see Asean as the region with the best economic opportunity. The business council also said that the survey saw the gap between Asean and “the next best location” for economic opportunity, China, widening significantly.

However, respondents still feel that more needs to be done to eliminate non-tariff barriers to trade in Asean. Even so, fewer respondents believe that non-tariff barriers to trade are increasing at 23 per cent, down from 38 per cent in 2021.

Meanwhile, a smaller proportion of respondents believe that these barriers are not decreasing, at 81 per cent, compared to 97 per cent in the year-ago period, while 23 per cent said they are increasing, compared to 38 per cent in 2021.

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Businesses surveyed also urged faster climate change action in Asean and quicker action in trade deal negotiations with the EU, the council said.

Chris Humphrey, its executive director, said: “Our respondents this year are sending a clear signal to both the EU and Asean: they want more trade deals, and they want them now.”

Martin Hayes, chairman of the EU-Asean Business Council, said that sentiments of European businesses towards Asean are “perhaps stronger than ever before”, and “optimism about economic recovery in the region is also strong, despite ongoing concerns around geopolitical tensions and supply chain bottlenecks”.

Tackling climate change, in particular, is vital if Asean wants to continue to attract foreign direct investment “at the record breaking levels it has been doing for the last few years”, he added.

The EU-Asean Business Sentiment survey aims to serve as a barometer for European business outlook in South-east Asia regarding key issues such as macroeconomic conditions, the policy and regulatory environment, and the development of bilateral and plurilateral free trade agreements in the region.

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