There is no clear sign what the new Anwar Ibrahim government’s next steps will be about a Malaysia-EU FTA, but indications are positive. Photo: AFP / Syaiful Redzuan / Anadolu Agency

Despite treading very different paths, ASEAN and the EU, which this year mark the 45th anniversary of their relationship, have successfully established themselves as two of the most successful regional organizations in the world.

While the European Union was a postwar peace-centered regional integration project, ASEAN’s foundations were of ideological designs aimed to counter communist threats and create a regional bloc, with external support, to counter any postwar revisionist tendencies. 

For its part over the past 45 years, the Association of Southeast Asian Nations has undergone massive mutations in terms of its organizing principles, priorities, and even its vision, mission, and self-perception. For one, the founding fathers would have never thought of a concept as bold and ambitious as “ASEAN centrality.”

Changes in ASEAN’s self-perception have not only led to such concepts but have also influenced its relations with its external partners.

As a trend-setting regional organization, the EU has influenced ASEAN in more ways than one, with ASEAN often looking up to the European bloc for resilient institutional best practices and the relationship largely remaining one based on a donor-recipient type.

And yet the EU’s long-standing relations with ASEAN have not been devoid of challenges. There are  several areas where both of these older-statesman organizations do not see eye to eye, but that has not stopped them from pursuing efforts to upscale their relationship. 

In 2020, ASEAN and the EU decided to elevate their relationship to the level of strategic partners, which is expected to advance their level of engagement while also making the summit-level dialogue a regular, if not strictly annual, feature of their diplomatic rendezvous.

Upgrading their dialogue partnership into one of a strategic nature is much wider and deeper than it seems. Both these regional organisations are deeply attached to and bound by their own (and some shared) respective sets of norms and values, albeit in varying degrees.

A firm belief in a rules-based international order is a defining feature of this partnership. A strong adherence to multilateralism and commitment to free and fair liberal trade make it even more imperative for them to find a way to work together to safeguard and strengthen the contemporary liberal international order, which faces threats from both the hegemon and the revisionist powers in the international system. 

The challenges brought about by the ongoing competition between the US and China are having huge implications not only within the Indo-Pacific region where it is largely being played out but also in Europe, where that competition can be felt at its immediate peripheries. It also questions the underlying principle that forms their raison d’être, which is economic interdependence.

ASEAN and the EU are not oblivious to their responsibilities and the plausible role they could play in influencing their surroundings. Toward that end, the two sides introduced a structured plan of action this year covering four identified areas of cooperation: economic; security; sustainable connectivity; and sustainable development.

One of the key areas identified under economic cooperation is the promotion of free and fair trade based on cross-border rules and regulations.

Unfortunately, saying it so is very different from getting it done, and even in an area that is relatively less contentious, ASEAN and the EU still face several obstacles. Take for instance the ASEAN-EU Free Trade Agreement, which would have made an apt centerpiece of this relationship.

Launched in 2007, the initiative is still a long way from the finish line. Today, the EU only has FTAs with two ASEAN members, Singapore and Vietnam. It is still negotiating with Indonesia, the Philippines and Thailand, while negotiations with Malaysia and Myanmar have been put on hold.

Even the compromise made by ASEAN to pursue negotiations through a bilateral approach instead of collectively, which would theoretically have impacted their leverage, failed to bring the negotiations to a quick conclusion. Instead, talks have progressed slowly. 

Some good news, though, appears on the horizon. In March of this year, the Malaysian deputy minister of international trade and industry stated that plans were under way to restart negotiations that had stalled since 2012, after seven rounds of negotiations. Yet March now seems a lifetime away, especially after the recently held general elections.

There is no clear sign what the Anwar Ibrahim government’s next steps will be about the Malaysia-EU FTA, but indications are positive. In a tweet made in January during a courtesy call by the EU ambassador, Anwar said, “May this alliance [Malaysia and the EU] continue to be strengthened and enhanced in the pursuit of shared benefits and mutual interests,” which points to a possible positive outcome.

Nevertheless, there are still challenges ahead, challenges that could impact the progress of negotiations with other ASEAN members. The EU’s strong stance on linking human rights and sustainable development with trade will continue to ensure that the journey toward an ASEAN-EU FTA will be a difficult one. 

This is not to say that an FTA is not possible. As the EU-Vietnam FTA has demonstrated, overcoming differences is not impossible where there is strong political will from both sides to arrive at an agreement. That said, even if the remaining negotiations are successfully concluded, the challenges will not abate as parties attempt to implement and enforce their commitments and obligations.

The costs, however, must always be set against the gains, and an FTA between ASEAN and the EU offers huge gains. Not only will it put in place another mega FTA to complement the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and ensure more trade is freed up, but it will ensure that the spirit of economic integration continues to thrive.

This has far wider implications considering how inward-looking some of free trade’s key protagonists have become lately.

The persistent danger of economic decoupling between the US and China could lead to fragmentation of global trade, which may force countries to choose between rival camps based more on ideologies than economic sense. This would be wholly inefficient and hamper economic growth and development for many countries, especially those in Southeast Asia.

ASEAN and EU enjoy a multifaceted partnership cutting across issues. They are important sources of investment and trade for each other. They still represent important markets. Based on the annual ASEAN Survey, the people of Southeast Asian consider the EU a trustworthy partner. Likewise, the European bloc recognizes the centrality of ASEAN according to their own EU Strategy for Cooperation in the Indo-Pacific.

As ASEAN and the EU celebrate the sapphire anniversary of their relationship, they need to double their efforts to see this through and no time offers them more impetus to do so than now.  

Rahul Mishra PhD is a senior lecturer at the Asia-Europe Institute, University of Malaya, where he heads the European Studies program. He is also associated with the University’s Centre for ASEAN Regionalism. His publications include Asia and Europe in the 21st Century: New Anxieties, New Opportunities (Routledge, 2021) and India’s Eastward Engagement from Antiquity to Act East Policy (SAGE, 2019). He tweets @rahulmishr_

Peter Brian M Wang is has held various positions in the Malaysian government, primarily at the Ministry of International Trade and Industry (MITI). He is currently attached with the National Institute of Public Administration (INTAN), where he lectures and undertakes research on economic and international-relations policy. He is working on his PhD at the Asia-Europe Institute, University of Malaya. He tweets @PBMWang