ASEAN KEY DESTINATIONS
EU and Asean trade ties increase
By David Swartzemtruber
The EU was the largest trading partner for Asean in 2009. The total trade between the two groupings was US$171.8 billion or 11.2 percent of their total bilateral trade, and EU was also the major source of investments in Asean.
Preceding the trade talks in Brussels, Malaysian International Trade and Industry Minister Datuk Seri Mustapa Mohamed issued a call for European firms to establish their production bases in Asean. Earlier this year Germany’s Volkswagen announced it would be manufacturing Volkswagen cars in Pekan, Pahang, Malaysia, for the Asean region as the best example of a single production base by a European company. More recently, Volkswagen announced it also plans to produce some models in Indonesia.
Among the industries that Malaysia was keen to attract from European countries were oil and gas, chemical, high-end electrical and electronics and knowledge-based activities, according to the Malaysian trade minister.
Asean faces stiff competition from China in attracting EU investors, however, that could be offset by advantages in logistics and the arrival of the Asean Economic Community in 2015 and its market of 600 million. The geographic placement of Asean between China and India is also a plus.
Another advantage is that several of the Asean countries have a more youthful population than China. China’s graying population will become a larger problem sooner rather than later.
Expect more trade offensives from Asean and its member states as the 2015 and the start-up of the AEC approaches as Asean countries begin to become accustomed to their new role in the global economy.
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