Southeast Asia

Asia is the world’s largest and most populous continent of high geostrategic importance to the EU, which is forging closer ties with countries across the region and promoting regional integration with the Association of Southeast Asian Nations (ASEAN) and the Asia-Europe Meeting (ASEM). The EU is a strong economic player in Southeast Asia, and an important development and aid donor, working to foster institution-building, democracy, good governance and human rights.

This fact sheet describes the Southeast Asia region. See also the fact sheets on South Asia (5.6.7) and East Asia (5.6.8).

Legal basis

  • Title V (EU external action) of the Treaty on European Union (TEU);
  • Articles 206-207 (trade) and 216-219 (international agreements) of the Treaty on the Functioning of the European Union (TFEU);
  • Partnership and Cooperation Agreements (PCAs) (bilateral relations).

Southeast Asia

a.Association of Southeast Asian Nations (ASEAN)

The first ASEAN summit was held in February 1976 in Bali, bringing together the 10 founding countries: Indonesia, Malaysia, the Philippines, Singapore and Thailand, plus Brunei Darussalam, Vietnam, Laos, Cambodia and Myanmar. ASEAN follows a strict policy of non-interference in its members’ domestic affairs.

The EU and ASEAN began meeting at summit level 40 years ago. The EU has a strategic interest in developing Asia’s regional integration and consolidating ties with ASEAN, and EU-ASEAN cooperation was reframed in 2012, with a Plan of Action to strengthen the enhanced partnership (2013-2017). The EU and individual ASEAN member countries pursue partnership and cooperation agreements (PCAs). The EU is ASEAN’s second-largest partner, with a 13% share of ASEAN’s total trade with the world. ASEAN is the EU’s third largest partner outside Europe (after the US and China). Negotiations for a region-to-region FTA between the EU and ASEAN — the EU’s ultimate goal — were revived in March 2017. EU-ASEAN two-way trade stood at EUR 208 billion in 2016, and the EU remained the largest external source of FDI flows into ASEAN in 2015, when they amounted to EUR 23.3 billion.

The most recent ASEAN Summit was held in September 2016 in Vientiane, Laos. The main item on the agenda was that of further commitment to the implementation of the ASEAN Community Vision 2025. The South China Sea issue was also on the agenda. The 31st ASEAN Summit will be hosted by the Philippines in November 2017 at Clark Air Base, Pampanga.

b.Asia-Europe Meeting (ASEM)

The Asia-Europe Meeting (ASEM) is a key forum between the EU and Asia, with 53 partners representing nearly 60% of the world’s GDP and over 60% of the world’s population, The 11th Asia-Europe Meeting Summit (ASEM 11) was held in July 2016, in Ulaanbaatar, Mongolia. The next ASEM Summit will be in Brussels in 2018. Beyond government-level meetings, ASEM also brings together members of parliament, the business sector, civil society, academia and the media.

c.Indonesia

Indonesia, a G20 member, the world’s third-largest democracy and the largest Muslim-majority country, is increasingly a key partner for the EU. Cooperation is based on the EU-Indonesia Partnership and Cooperation Agreement (PCA), which entered into force in 2014. Negotiations on a Comprehensive Economic Partnership Agreement (CEPA) between the EU and Indonesia were officially launched in July 2016. The introductory round of negotiations took place in September 2016 and, following the second negotiation round from 24 to 27 January 2017, nine of the EU’s initial negotiating positions were published on 7 February 2017.

The EU is Indonesia’s fourth biggest trading partner, with total trade worth EUR 25 billion (2016). The first EU-Indonesia Joint Committee meeting under the Framework Agreement on the Comprehensive Partnership and Cooperation took place on 28 November 2016. The EU’s Forest Law Enforcement Governance and Trade (FLEGT) Action Plan has helped enable Indonesia to develop one of the most advanced timber legality assurance systems in the world. The first FLEGT licence was issued on 15 November 2016.

Presidential and general elections have been scheduled for 2019. President Joko Widodo will stand for re-election. Indonesia’s GDP growth is expected to be around 5% in 2017-2021.

European Parliament resolutions have addressed human rights issues and attacks on religious minorities.

d.Myanmar

The EU has been an active partner in Myanmar’s democratic transition. It opened a delegation to Myanmar in 2013. The European Council conclusions of 20 June 2016 on an EU strategy with Myanmar welcomed the peaceful transfer of power and the consolidation of democracy following the elections in November 2015. The European Parliament participated in the EU Election Observation Mission (EOM) for the 2015 general elections.

The EU granted Myanmar access to the Everything But Arms trade scheme in 2013 when the EU and Myanmar launched negotiations for an investment protection agreement. The fifth round of negotiations on the EU-Myanmar Investment Protection Agreement took place on 26 and 27 April 2017. Total trade between the EU and Myanmar amounted to EUR 1.6 billion in 2016. The EU is one of the main donors of assistance to Myanmar. The amount of assistance allocated for the 2014-2020 period is EUR 688 million. Focus areas are rural development, education, governance and the rule of law, and peacebuilding. Since May 2015, the EU has participated in the ‘Initiative to promote fundamental labour rights and practices in Myanmar’ with the United States, Japan, Denmark and the International Labour Organisation (ILO).

In March 2016, Htin Kyaw became the first democratically elected president. However, the government still shares power with the army, which controls 25% of the parliament’s seats. The European Parliament has addressed concerns about the human rights situation, particularly ethnic violence, in its resolutions — most recently in its December 2016 and September 2017 resolutions on the persecution of the Rohingya minority.

Since August 2017, the most conflictual issue in Myanmar has been the situation in Rakhine state, where the Rohingya community, rendered stateless by the Myanmar 1982 Citizenship Law, are being persecuted and discriminated against. The Aung San Suu Kyi Advisory Commission on Rakhine state, chaired by Kofi Annan, submitted its final report to Myanmar’s national authorities on 23 August 2017. The report recommends urgent action to prevent violence, maintain peace and foster reconciliation in Rakhine state. However, on 25 August 2017, a wave of violence was initiated with a simultaneous attack against 30 police stations in Rakhine by the Arakan Rohingya Salvation Army (ARSA). The response to this attack was a massive ‘clearance operation’ by the army against the Rohingya community. Hundreds of civilians were killed by the military and the Buddhist paramilitary. Since then, around 480 000 Rohingyas have fled from their homes for Bangladesh to escape the violence. In the north of Rakhine state, a large number of Rohingya villages have been burned down.

In September 2017, the United Nations asked the international community for help and humanitarian support for the Rohingya refugees from Myanmar. The UN Security Council urged Myanmar to end the violence and UN Secretary-General Antonio Guterres has described the situation as ‘ethnic cleansing’.

e.The Philippines

In May 2016, Rodrigo Duterte won the presidential election with 39% of the vote, thereby obtaining strong backing and considerable political support to implement his main priorities rapidly. The new administration has also taken controversial measures against drug trafficking with ‘shoot to kill’ orders leading to flagrant human rights violations. Human rights organisations have urged the international community to react more robustly against President Duterte’s campaign.

Duterte has also changed the Philippines’ foreign policy, partially breaking its alliance with the US and building a new alliance with Russia and China, despite the controversy over the South China Sea, which is also a fundamental aspect of the Philippines’ foreign policy.

ASEAN is the Philippines’ first trading partner and, as such, is at the core of its foreign policy. The country holds the ASEAN rotating presidency in 2017. The EU and the Philippines signed a Partnership Cooperation Agreement (PCA) in 2011, but it has not yet been ratified by all the Member States. The European Parliament has been increasingly concerned by the human rights violations in the Philippines, adopting resolutions on the subject in September 2016 and March 2017.

Negotiations on a free trade agreement (FTA) with the Philippines were formally launched in December 2015. The second round of negotiations took place from 13 to 17 February 2017 and moved to text-based negotiations in a number of areas (such as trade in goods, rules of origin, Social Protection Systems (SPS) measures, and trade and sustainable development). The Philippines is currently enjoying GSP+ trade preferences. The EU is a significant donor to the Philippines, providing EUR 325 million for 2014-2020, more than double the amount for the previous period. Focus areas are the rule of law and inclusive growth.

On 23 May 2017, President Duterte declared martial law in Mindanao, mainly because of the presence of the so-called Islamic State militants in the Muslim-majority city of Marawi and other parts of the island. Armed clashes took place in Marawi (Lanao del Sur Province, the largest city in the Autonomous Region in Muslim Mindanao) between the Philippines Army and the Maute and Abu Sayyaf groups, linked to so-called Islamic State. Civilians have been fleeing Marawi.

f.Vietnam

Vietnam is one of the EU’s key partners in Southeast Asia. The EU-Vietnam Framework Agreement on a Comprehensive Partnership and Cooperation Agreement (PCA) entered into force in 2016. The EU is Vietnam’s third largest trade partner, and relations are expected to intensify when the EU-Vietnam Free Trade Agreement (FTA) enters into force, which is expected in 2018. The EU is also one of the largest sources of foreign direct investment in Vietnam. It is Vietnam’s main development cooperation donor. A total of EUR 400 million was allocated for 2014-2020, focusing on good governance, energy and climate change.

Since the fate of the Trans-Pacific Partnership (TPP) has become more than uncertain, the FTA and the commitments therein concerning labour rights and civil society may become even more important.

Vietnam has undergone rapid economic and social transformation over the past two decades, alongside integration into the global economy. It is one of the fastest growing countries in ASEAN, with an average GDP growth rate of around 6% between 2010 and 2016. The EU has a negative trade in goods balance with Vietnam of around EUR 23 billion. In 2016, EU-Vietnam trade in goods was worth over EUR 42 billion, with EUR 33 billion in imports from Vietnam into the EU and EUR 9 billion in exports from the EU to Vietnam. The European Parliament adopted a resolution in June 2016 on human rights issues in Vietnam.

g.Thailand

The EU-Thailand partnership is based on a framework agreement signed in 1980. The EU and Thailand completed negotiations for a Partnership Cooperation Agreement (PCA) in March 2013, but the process of signing the agreement was halted following the military coup in 2014. Free Trade Agreement (FTA) negotiations were launched in 2013 but have also been halted.

Thailand is a constitutional monarchy. Following a military coup, the National Council for Peace and Order (the Junta) has been ruling the country since 22 May 2014. Prayut Chan O-cha has been the Prime Minister since August 2014. The military has supressed opposition by imposing martial law and human rights abuses have been reported. King Bhumibol Adulyadej died in late 2016. The formal coronation of his son, King Maha Vajiralongkorn, will take place in October 2017 after the cremation of his late father. The monarchy is very popular among the Thai population.

The EU has called repeatedly for the restoration of democratic government. The EU is Thailand’s third largest export market and Thailand is one of the EU’s main trade partners in ASEAN. It is also a significant donor to civil society. The European Parliament adopted a resolution on civil society in Thailand in October 2016 and a resolution on the political and human rights situation in October 2015. Thailand has been given a Yellow Card notification in connection with the EU Regulation to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing and consultations are under way.

The insurgency in the southern provinces with a Muslim majority (Yala, Pattani and Narathiwat) is restricted to those areas and does not yet represent a major threat overall in Thailand. In February 2017, the Junta initiated peace talks with the Mara Pattani, a group including six insurgent movements in southern Thailand.

h.Cambodia

In 1993, following the Paris Peace Agreements, Cambodia adopted a Constitution which laid the foundations of a liberal democratic state.

EU-Cambodia relations are based on the Framework Cooperation Agreement of 1999 and a joint committee holds meetings biannually. Cambodia benefits from the Everything But Arms trade scheme and the EU is the largest export market for Cambodian products. The EU is a major development cooperation and humanitarian assistance donor, with funding of EUR 410 million allocated under the 2014-2020 Multiannual Indicative Programme (MIP) and focusing on agriculture and resource management, education and skills, and good governance. The EU has blacklisted Cambodia in connection with the EU Regulation to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing since 2014.

After a period of calm, the political situation deteriorated in the last quarter of 2015 due to tensions between the opposition and the ruling party, with political intimidation ahead of the next parliamentary general elections expected in 2018. Members of the European Parliament’s Subcommittee on Human Rights visited Cambodia in March 2016. The European Parliament has adopted several resolutions on the political and civil rights situation in Cambodia.

i.Singapore

The EU and Singapore initialled a Partnership and Cooperation Agreement (ESPCA) and an EU-Singapore Free Trade Agreement (EUSFTA) in 2013. Both agreements are awaiting ratification. The EU is Singapore’s third most important trading partner and largest source of foreign direct investment. The Court of Justice of the European Union clarified in its opinion of 16 May 2017[1] that although the EU is exclusively competent for most of the EUSFTA in its current form the EU alone cannot conclude it, because some of the provisions, notably those relating to non-direct foreign investment and to dispute settlement between investors and states, fall within competences shared between the EU and the Member States.

The two sides have a high level of cooperation in the areas of business, science and technology. The EU calls for the abolition of the death penalty and supports the work of civil society through the European Instrument for Democracy and Human Rights (EIDHR).

j.Brunei

The EU is actively enhancing its relations with Brunei, but there is not yet a framework agreement. Relations are mainly handled through ASEAN. A Partnership and Cooperation Agreement (PCA) is being negotiated. The EU is Brunei’s fifth largest trading partner and trade between the EU and Brunei is mainly in machinery, motor vehicles and chemicals.

Brunei is ruled by Sultan Hassanal Bolkiah, with no political liberalisation. Between 2013 and 2016, the Penal Code was reformed incorporating a new Sharia-based approach. The country’s economy is based on the oil and gas sectors. Brunei’s main diplomatic activity is in the regional multilateral sphere, especially within ASEAN.

k.Laos

EU-Laos relations are based on the 1997 Cooperation Agreement. Since then, Laos’ Government has seen the EU as a development aid and trade partner, rather than a political one. The EU will allocate EUR 207 million to Laos for 2014-2020.

Laos benefits from the EU’s Everything But Arms scheme and trade has been growing rapidly in recent years.

Laos has had a one-party system since the end of the civil war in 1975. Fast economic development, together with the maintenance of the country’s extensive internal-security apparatus, has secured the position of the Lao People’s Revolutionary Party (LPRP), which holds power in the country under tight control. All other political parties are prohibited and do not pose a threat to the government because dissidents are harshly repressed. Opponents are mainly ethnic Hmong and expatriates in Thailand and the US, who are also mainly Hmong but also of Lao ethnicity.

Laos’ 8th National Socio-Economic Development Plan (2016-2020) focuses on high economic growth with an overall target of eligibility to graduate from ‘least developed country’ (LDC) status by 2020. Laos is stepping up its political and economic relations with China and with other Southeast Asian countries in order to boost investments, mainly in infrastructure and hydropower dams along the Mekong River.

l.Malaysia

The EU and Malaysia concluded negotiations on a Partnership and Cooperation Agreement (PCA) in 2015 and are currently negotiating a Free Trade Agreement, but the negotiations have been put on hold at Malaysia’s request. A stocktaking exercise is being finalised to assess the prospects for resuming negotiations. The EU is Malaysia’s third largest trading partner. EU development cooperation focuses on sustainable development and the environment, research and technological development, migration and asylum programmes, human rights and the abolition of the death penalty.

The next parliamentary election is scheduled for the end of 2018. The opposition is divided and the ruling coalition is doing well in the polls.

[1]Court of Justice of the European Union, Opinion No 2/15 of 16.5.2017, ECLI:EU:C:2017:376.
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62015CV0002(01)

Jorge Soutullo / Anna Saarela

09/2017