Saturday, August 19, 2017

ASEAN touted by EU firms as an alternative to China

Celebrating 40 years of EU-ASEAN relations

Development of international trade in goods in Euros between 2005 and 2015. Photo - Eurostat and ASEANstatsDevelopment of international trade in goods in Euros between 2005 and 2015. Photo - Eurostat and ASEANstats

The 28 member states of the European Union (EU28) recorded a trade deficit for goods with Association of Southeast Asian Nations (ASEAN), narrowing from €27.1 billion in 2005 to €15.1 billion in 2013 before widening to €35.4 billion in 2015, according to the report published by the EU.

As the EU and ASEAN celebrate this year the 40th anniversary of the establishment of Dialogue Relations in 1977, Eurostat, in cooperation with the European External Action Service and the European Commission’s Service for Foreign Policy Instruments, published its statistical report 40 Years of EU-ASEAN Cooperation, Key statistics (2017 edition).

The production of this publication has been funded by the EU’s project “Advancing EU’s role in multilateral fora in Asia”.

The report seeks to provide a specific focus on trade, investment and migration, and offers an overview of key data regarding the economy, finance, labour market and population.

Destination of EU-28 exports of goods to ASEAN, 2015 (percentage share of EU-28 exports to ASEAN). Photo - EurostatDestination of EU-28 exports of goods to ASEAN, 2015 (percentage share of EU-28 exports to ASEAN). Photo - Eurostat

International trade for EU and ASEAN

The total value of the goods exported from the EU28 to the rest of the world (outside of the EU) in 2015 was €1.79 trillion (€1.79 thousand billion), 71pc higher than its level in 2005. Imports rose at a slower pace, up 46pc to €1.73 trillion, such that a trade deficit in goods between 2005 and 2012 turned into a surplus between 2013 and 2015.

There was an even faster development to international trade flows for ASEAN (with partners outside of the bloc), as exports and imports more than doubled between 2005 and 2015. The slightly faster increase in imports resulted in the trade surplus narrowing over this period and ASEAN reported an almost balanced position for trade in goods in 2012 and 2014. ASEAN’s international exports and imports of goods in 2015 were valued at just under €800 billion, equivalent to 44pc of the equivalent values for the EU28.

Within ASEAN, the largest trader of goods in 2015 was Singapore. Other large traders of goods were Thailand, Malaysia, Vietnam and Indonesia, all with imports and exports of goods valued in excess of €100 billion.

Among the EU members, Germany was the largest trader of goods, while the next largest exporters were the Netherlands, France, the United Kingdom, Italy and Belgium.

Six of the ASEAN member states reported a trade surplus for goods in 2015, with that of Singapore larger than those of the other five combined.

EU-ASEAN trade

In 2015, the EU-28’s exports of goods to ASEAN were valued at €83 billion, up 85.8pc since 2005, while imports were valued at €118 billion, an increase of 65.0pc over the same period. The share of the EU28’s exports of goods to non-EU countries that were destined for ASEAN rose from 4.3pc in 2005 to 4.6pc by 2015, while ASEAN’s share of the EU28’s imports of goods from non-EU countries rose from 6.1pc to 6.9pc.

Origin of EU-28 imports of goods from ASEAN, 2015 (percentage share of EU-28 imports from ASEAN). Photo - EurostatOrigin of EU-28 imports of goods from ASEAN, 2015 (percentage share of EU-28 imports from ASEAN). Photo - Eurostat

As such, by 2015 the EU28’s exports of goods to ASEAN were greater in value than its exports of goods to any of its individual trading partners except for the United States, China and Switzerland, while its imports of goods from ASEAN were greater in value than its imports of goods from any of its individual trading partners except for China, the United States and Russia.

The EU-28 recorded a trade deficit for goods with ASEAN, narrowing from €27.1 billion in 2005 to €15.1 billion in 2013 before widening to €35.4 billion in 2015.

Commenting on the report, Filip Lauwerysen, executive director of the European Chamber of Commerce Myanmar, told The Myanmar Times that businesses in Europe have diversified their commercial interests in Myanmar to many sectors.

“Myanmar is receiving increasing attention from Europe’s business community. EuroCham is receiving an increasing amount of business delegations from various European countries. These delegations cover a wide range of sectors; clearly no longer limited to the oil and gas sectors, which was the case for many years,” he said.

Mr Lauwerysen added that manufacturers active in southern China are exploring possibilities to move the factories to ASEAN.

“Also, many European companies that are currently running factories in the South of China are contacting us to scout the manufacturing market in Myanmar. As production costs are rising in China and doing business in China is becoming increasingly difficult for European companies, ASEAN is offering them an important alternative to diversify their portfolio of suppliers and manufacturing units,” he said.