How European companies prepare for ASEAN integration
EUROPE BEAT - Henry J. Schumacher (The Freeman) - September 19, 2014 - 12:00am

ASEAN integration is just around the corner. The EU started early, planning a deeper engagement with the Asean countries after the first signs were visible that the China run had slowed down to more realistic expectations, and that India would not grow as fast as China promised and did. More than five years ago, the European Commission approached ASEAN governments with the idea of entering into a free trade agreement between both blocks. For a number of reasons a region-to-region FTA did not click at that stage and the European Commission started individual discussions, and finally negotiations, with a number of Asean members.

Big European businessalso understood that the Asean Economic Community, the single market by 2015, had to be taken seriously. The 600-million AEC market offers a multitude of opportunities for European business in Europe and for European companies already active in the region; at the same time, everybody has to understand that competition will increase in all Asean countries and will create challenges for those Asean and European companies that do not properly prepare. Increased competition will hit all sectors, from agriculture to services to manufacturing. If business prepares well, bigger markets can be addressed, economies of scale be developed and markets beyond Asean be targeted. In that respect, an EU-Asean member states FTA comes in handy.

But European politicians also saw the need to get European SMEs attracted to the growing Asean individual markets and eventually the AEC. The European Commission has started an initiative to create an infrastructure in Asean and in all EU member states that will inform SMEs in Europe about business opportunities in the Asean member states and in Asean in total. The project will initially involve Indonesia, Malaysia, the Philippines and Vietnam. Cambodia and Laos will follow. Singapore will also be involved and Thailand already set up an EU-ASEAN Business Center two years ago.

The basic idea is to ‘transport’ the information about business opportunities in Asean to the SMEs in all EU member states and – more importantly – to thoroughly assist those SMEs that wish to enter one or more Asean markets, and guide them to success. The European chambers of commerce in all the Asean countries will be deeply involved and will closely cooperate with the business organizations the individual EU member states have already established in these countries. In the Philippines, for instance, the European Chamber of Commerce of the Philippines will closely work together with the British, French, German, Italian and Spanish Chambers of Commerce, with all European business clubs and with the commercial sections of the European embassies in the country. It is trusted that the EU initiative will finally become reality in the Philippines (and in the other Asean countries), giving European business in all Asean countries a service platform, creatingcapabilities and capacity to be able to service the European SMEs and establish a sustainable business model that will assist European business long-term.

In this context, however, it is important to add that European SMEs or European business at large will not succeed in Asean if we fail to bring Asean business together with European business in win-win partnerships. In other words, Asean business will benefit and will become more competitive to address the European market. The FTAs between the EU and the Asean member states have this objective in mind.

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