POSITION | FREE TRADE AGREEMENT | EU – SOUTHEAST ASIA
Industry Demands for Bilateral FTAs between the EU and Malaysia, the Philippines, and Thailand Necessary steps for successful conclusion of ongoing negotiations
March 2026 Executive Summary Southeast Asia is one of the most dynamic economic regions in the world and is becoming increasingly important for the German industry. In times of geopolitical uncertainty, trade wars, and China's growing influence, the region is becoming more and more attractive for German diversification strategies. Free trade agreements (FTAs) are a key lever for the EU to secure export markets, creating new trade opportunities for companies, preventing supply chain disruptions, and thus minimising geopolitical risks. Bilateral FTAs between the EU and Malaysia, the Philippines, and Thailand would remove trade barriers, improve market access for European goods, services, and in public procurement, make data transfer more agile, and strengthen intellectual property rights. The recently concluded FTA between the EU and Indonesia, which regulates precisely these areas, can be seen as a blueprint. In addition, these agreements could serve as a model for partnerships with other countries in the Association of Southeast Asian Nations (ASEAN) to improve the business environment in general and to consolidate the EU's strategic presence in the region. The ASEAN region is already strongly linked to other parts of Asia through trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Without similar agreements, European companies are at a disadvantage compared to their East- and Southeast Asian competitors. The successful conclusion of the FTAs, alongside binding investment protection agreements between the EU and Southeast Asian countries that include mutually respected dispute settlement mechanisms, would improve the competitive conditions for European companies in the region and significantly strengthen the (economic) partnership between the two economic areas. Successful agreements with Malaysia, Thailand, and the Philippines would constitute a milestone for an EU-ASEAN FTA in the long term. Free trade agreements already exist with Singapore and Vietnam. The agreement with Indonesia has been negotiated. The text is now going through the next steps on the EU side: translation, legal review, and approval by the Council and the European Parliament. A more pragmatic approach in these negotiations is needed. The negotiating parties must be prepared to compromise and, if necessary, abandon positions that they have maintained in other FTAs. Only the most sensitive areas (defined below) and those of strategic importance to the trading partners should be excluded from trade liberalisation. A new balance must be found between sustainability requirements and economic interests in free trade agreements. Chapters on sustainability must above all else
Moritz Fink | International Affairs | T: +49 30 2028 1609 | m.fink@apa.bdi.eu | www.bdi.eu