As part of the API, IDEAS consider the strategic economic relationship between ASEAN and the European Union (EU). The comparison is often made between these two regional blocs, which represent the two leading efforts to integrate their respective regions. The EU’s economic integration is significantly deeper and supported by a far more developed institutional and legal framework. The EU is in general more economically developed than ASEAN and is also more homogeneous in its level of development across its Member States than is the case across the 10 members of ASEAN.

Despite these differences, we believe that ASEAN and the EU share an essential similarity: they are both groupings of countries that recognise the importance of regional integration and the benefits of openness to trade and investment in the context of a rules-based system. We therefore believe that putting the economic relations between the EU and ASEAN on the best possible footing is an important step in ensuring the long-term prosperity of ASEAN.

In our 2018 EU-ASEAN Free Trade Agreement (FTA) Report we discussed the prospects for a FTA between the EU and ASEAN. The report concluded that the prospects for a comprehensive FTA are currently low, due to a range of issues. Among those issues was the ongoing dispute over palm oil, between the EU on the one hand and Indonesia and Malaysia on the other. Therefore, in this report we decided to further investigate this dispute, with objective of setting out the issues clearly for stakeholders on both sides to provide a common basis of understanding.