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Conflict Overshadows EU and ASEAN Negotiations in 2023

The intimacy between ASEAN and the European Union contrasts with a series of conflicts between the two parties. This issue is believed to be the biggest stumbling block when the EU and ASEAN get closer next year.

In mid-December 2022, the 10 ASEAN member countries and the 27 European Union members met for the first time in Brussels. The conference marked a new closeness that has become thicker since ASEAN and the EU upgraded their relationship status to "strategic partnership" in 2020.

Many parties in Brussels are optimistic that Indonesia, which holds the ASEAN presidency this year, will be a reliable partner. Indonesia is the first democratic country to lead ASEAN in recent years. It is not surprising that Jakarta is believed to be able to bridge differences with the European Union.

"Indonesia's leadership in ASEAN will certainly continue the positive trend in relations with the EU," said William Yuen Yee, researcher at Harvard University. At least this was promised by Minister of Foreign Affairs Retno Marsudi. For Southeast Asia, the European Union is a strategic partner in balancing the conflict between the US and China.

Geopolitical crisis

However, the favorable prospects for relations between the EU and ASEAN must still be tested in 2023. Analysts believe that the Russia issue could become a stumbling block. Because even though ASEAN has signed an Agreement of Friendship and Cooperation with Ukraine, ASEAN does not necessarily choose to take sides in the conflict with Russia.

Laos and Vietnam, for example, have abstained whenever the UN General Assembly discussed sanctions against Russia. Similar concerns can be seen in the diplomatic responses of other ASEAN countries.

The European Union considers ASEAN countries to be more vocal in opposing war. This is considered rational given the territorial conflicts that China is intensifying in the South China Sea.

The Ukrainian war "reminds us that today, in an interdependent world, there is no longer a European problem or an Asian problem," said Ursula von der Layen, President of the European Commission, at the EU-ASEAN Summit in Brussels. "All the challenges we face today are global and affect us all."

"You, ASEAN, understand very well what is at stake here," he added.

Democracy and commerce

The EU has been increasingly linking trade relations with the political situation in the country concerned. Relations with Cambodia or Thailand, for example, have cooled due to the democratic situation. "In its Indo-Pacific strategy, the EU emphasizes the promotion of human rights and democracy," said Alfred Gerstl of Palacky University Olomouc.

"That's why it is very difficult to imagine that the European Union will want to accept an election result that was not obtained in a free and fair way," he said. "ASEAN will instead emphasize the basic principle of non-interference in the internal affairs of each member. This difference in attitude is difficult to bridge."

Shada Islam, a political analyst in Brussels, thinks that "political intimacy" between the EU and ASEAN could end in 2023 over the issue of trade protectionism. Indonesia and Malaysia are currently suing the EU to the World Trade Organization (WTO) because they want to reduce palm oil imports. For both countries, the move which was claimed as a climate commitment was accused of being an attempt to protect vegetable oil farmers in Europe itself.

The WTO is expected to make a decision in early 2023. Last December, the WTO granted the EU 's lawsuit rejecting Indonesia's decision to ban exports of raw nickel ore. Such trade conflicts are considered to have the potential to damage economic relations that are being built.

"It is very unlikely that Indonesia and Malaysia will want to drop their lawsuit against the ban on palm oil in the European Union, and they will probably appeal against the WTO decision," said Islam.

Currently the free trade agreement (FTA) negotiations between the European Union and ASEAN are still frozen. Brussels has previously agreed on FTAs ​​with Vietnam and Singapore. A further round of negotiations is currently underway with Indonesia and Malaysia. But the biggest opportunity lies in the FTA negotiations with the Philippines and Thailand which are predicted to be completed in 2023.