Note from the Editor

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Amid supply chain diversification, digital transformation, energy transition and ongoing geopolitical shifts, governments across Southeast Asia are implementing reforms aimed at attracting foreign investment and strengthening economic competitiveness. While recent years have been dominated by discussions on global tariffs, trade tensions and supply chain resilience, one of the most significant developments for European businesses in the region is taking place in trade diplomacy. The European Union is advancing an ambitious network of bilateral free trade agreements (FTAs) with ASEAN member states, laying the groundwork for what could eventually evolve into a broader EU-ASEAN economic framework. FTAs are already in force with Singapore and Vietnam.

A major milestone was reached in Indonesia, where negotiations on the EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) were concluded in September 2025 after almost a decade of talks. The agreement will eliminate import duties on 98.5 % of tariff lines and improve market access for services, investment and public procurement. Beyond trade liberalization, CEPA reflects the growing strategic importance of Indonesia as a partner for reliable access to critical minerals and materials.

Thailand is also making substantial progress. By mid-2026, negotiators had completed or provisionally closed numerous chapters, including trade remedies, SMEs, sustainable development, technical barriers to trade and services-related disciplines. Thailand is therefore well positioned to become the EU’s next FTA partner in ASEAN, further enhancing its role as a regional manufacturing and export hub for European businesses.

Another noteworthy development is the resumption of EU-Malaysia FTA negotiations in January 2025 after more than a decade of suspension. As a regional leader in semiconductors, electronics, medical devices and digital services, Malaysia offers significant opportunities for European investors. The negotiations cover not only traditional market-access issues but also digital trade, intellectual property, sustainability, energy and critical raw materials. Combined with its legal stability, strong infrastructure and regional connectivity, Malaysia remains a market to watch closely.

Negotiations with the Philippines resumed in March 2024 and have advanced steadily. With a population exceeding 115 million, a rapidly expanding renewable energy sector and significant critical mineral resources, the Philippines is increasingly aligned with Europe’s economic and strategic priorities.

Taking together, these agreements have the potential to create an increasingly integrated network of preferential trade relationships across Southeast Asia’s key economies. They also reflect a broader shift in Europe’s approach to the region. ASEAN is no longer viewed merely as an alternative manufacturing base, but as an essential geopolitical, industrial and technological partner. As the legal framework governing EU-ASEAN trade continues to evolve, businesses should pay close attention to the opportunities it creates. In this light, we trust this edition outlines new aspects that you may find interesting for your business activities in Southeast Asia.

Sincerely yours,

Markus Schlueter

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