EU and ASEAN focus on connectivity in move towards free trade agreement

The EU and ASEAN represent more than 1 billion people and 25 per cent of global economic power

The European Union and the Association of Southeast Asian Nations (ASEAN) have agreed to elevate their relationship to a strategic partnership, marking a first step to simplified trade between the bodies.

The announcement came during a virtual meeting of EU-ASEAN Foreign Ministers, held in Berlin on 1^st December 2020.

"As close economic partners, we will stand up for safe and open trade routes and a free and fair trade," German Foreign Minister Heiko Maas said after the meeting.

"Together, we represent more than a billion people and almost 25 per cent of global economic power," he added.

The ASEAN group comprises 10 South Asian countries: Brunei, Cambodia, Laos, Thailand, Myanmar, Malaysia, Indonesia, Singapore, Vietnam and the Philippines.

At Tuesday's virtual meeting, the ministers agreed to work towards an ASEAN-EU free trade agreement (FTA), stating that it would "send a strong signal of both regions' commitment to bring tangible benefits through economic integration and trade liberalisation".

They also vowed to "promote connectivity within and between ASEAN and the EU".

The declaration came a day after the launch of the ASEAN Customs Transit System (ACTS), which allows people to make a single customs declaration electronically, through an app, while shipping packages to other member nations of the ASEAN group. The unified declaration made through the ACTS app will be accepted by custom officials across the ASEAN states.

The Asian trading bloc believes that the ACTS system would help to reduce administrative costs for trade by 10 per cent by 2025.

ACTS meets the standards set by the World Customs Organisation in Brussels, and was largely funded by the EU as part of its efforts to promote development in the ASEAN region.

The Joint Statement on Connectivity [PDF] from EU-ASEAN describes the ACTS software system as "a promising first step to identify ASEAN and the EU cooperation on regulatory alignment, simplifying customs procedures, and movement of transit goods by road".

The statement suggests more collaboration between EU and ASEAN to reach similar goals.

Both parties recognised "digital connectivity with a focus on our people as a key enabler to inclusive growth and sustainable development through cooperation in the areas of digital innovation, digital infrastructure and logistics, digitisation of manufacturing and services, ICT security, the adoption of technology by MSMEs, and increasing accesses to digital services, ensuring protection of personal and consumers' data and privacy."

They also agreed to explore "a possible connectivity partnership," which calls for digital network interoperability between the two blocs and the flow of data between them.