Do not put TTIP on ice
“A free trade agreement between the European Union and ASEAN would be a major step forward – which could greatly benefit the people in Europe and Southeast Asia. Therefore it is especially encouraging that the two sides have now spoken out in favor of a new trade and investment agreement,” said Matthias Wissmann, President of the German Association of the Automotive Industry (VDA). He was commenting on the results of the EU-ASEAN trade consultations in Kuala Lumpur. The ASEAN organization comprises ten Southeast Asian countries with over 620 million inhabitants. The largest countries are Indonesia, the Philippines, Vietnam and Thailand.
“The political and economic development of the ASEAN states has been exceptionally positive in recent years,” Wissmann said, adding that this could be seen above all on the motor vehicle market. Within five years new registrations have risen by around two thirds, to 3.2 million in 2014. In Indonesia, the largest country in ASEAN, new registrations have in fact almost trebled during the same period, climbing to 1.2 million passenger cars and commercial vehicles. Wissmann stressed, “We assume that this growth will continue, as the potential is large. This is because the young population and the emerging middle class of keen consumers ensure dynamic growth. And the level of vehicle ownership is still comparatively low, at around 50 passenger cars per 1,000 inhabitants.”
“An EU-ASEAN free trade agreement would provide better access to this important sales market for European business. At the same time, the countries could benefit even more from European investments. Today most foreign direct investments in ASEAN already come from the EU. An agreement of this type would therefore also be a gigantic development program for the ASEAN states,” Wissmann continued.
Until now, the EU has conducted negotiations on the agreement with only a few countries in ASEAN. “A comprehensive ASEAN agreement would greatly simplify trade with the region and most of all it would help small and medium-sized enterprises,” Wissmann said.
By contrast, speculations about whether the Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU could possibly enter into force only after the end of US President Barack Obama’s term in office draw criticism. Wissmann said: “Considering putting the TTIP on ice is not helpful. We should keep a firm eye on the objective, and approve the free trade agreement while President Barack Obama is still in office. This ought to be possible if – as planned – the major issues are clarified by the end of 2015.”