The European Union (EU) is continuing to expand its economic diplomacy in Southeast Asia through a series of free trade negotiations that are now “progressing very well” with Malaysia, Thailand, and the Philippines. This statement was made by EU Trade Commissioner Maroš Šefčovič on Thursday, 2 October 2025, on the sidelines of a meeting with ASEAN economic ministers in Kuala Lumpur.
Šefčovič emphasized that the EU does not intend to stop at just one country. “My message to my partners in ASEAN was that we do not want to stop here,” he said.
He added that free trade negotiations with Thailand, the Philippines, and Malaysia have made significant progress and are expected to be finalized by 2027, coinciding with the 50th anniversary of EU-ASEAN negotiations.
Landmark Agreement with Indonesia
This EU initiative came just two days after the signing of the Indonesia-European Union Comprehensive Economic Partnership Agreement (CEPA) on 30 September 2025, following nearly a decade of negotiations.
The agreement is expected to come into full effect by January 2027 and covers 21 areas of cooperation, including trade in goods and services, investment, customs procedures, digital trade, and sustainable growth.
CEPA also opens investment opportunities in strategic sectors such as electric vehicles, electronics, and pharmaceuticals, and includes the removal of import duties on more than 90 percent of products.
For example, Indonesia’s 50 percent tariff on cars imported from the EU will be phased out over five years. Indonesia expects bilateral goods trade, which amounted to approximately USD 30 billion in 2024, to double once the agreement is fully implemented.
EU Strategy Amid Global Uncertainty
The EU’s initiative is also seen as a strategic response to protectionism and global trade uncertainties, particularly those triggered by U.S. President Donald Trump’s tariff policies, which range from 10 to 40 percent for ASEAN countries. Laos and Myanmar face the highest rates, while Singapore is subject to a baseline 10 percent levy.
The EU views trade agreements with individual ASEAN countries as building blocks toward a comprehensive regional trade agreement between the EU and ASEAN.
For instance, agreements with Singapore, effective since November 2019, and Vietnam, effective since August 2020, have increased EU trade with these countries by 32 percent and 47 percent, respectively.
Historical Negotiation Challenges
Negotiations between the EU and ASEAN have not always been smooth. In 2012, Malaysia suspended talks, citing unfair treatment of its key exports, including palm oil.
Thailand halted negotiations in 2014 following a military coup, while the Philippines paused talks in 2019 due to a deteriorating human rights record under President Rodrigo Duterte.
Despite these past obstacles, the EU has continued negotiations with ASEAN, balancing strategic interests with human rights considerations. Additional pressure from U.S. tariffs has prompted both the EU and ASEAN countries to form new trade alliances, reducing economic dependence on an increasingly unpredictable United States.
Network Expansion and Global Implications
Beyond Southeast Asia, the EU has also expanded trade negotiations with India and concluded an agreement with the Mercosur bloc in South America in 2024. The frequent exchanges of trade delegations between Europe and ASEAN signal significant potential economic shifts, largely in response to U.S. tariffs.
If this trend continues, the U.S. economic influence in the region is likely to decline over the long term, while the EU strengthens its role as a major economic partner for ASEAN.
