EU-ASEAN trade corridor: a aolid long-term growth trend

Trade relations between the EU and ASEAN have remained strong throughout the global recession and period of patchy growth following the GFC. Between 2008 and 2014, EU exports to ASEAN grew at a cumulative annual rate of 3.9%, while imports from ASEAN grew by 2.2%. Comparatively, EU total exports to the world rose by 2.7% and imports fell by 0.7% in the same period. Growth in EU-ASEAN trade has been driven by increased trade in manufactured goods for both sides.

China's rise as a trade power and growing trade between emerging markets reduced the EU's share of ASEAN's total exports to 10.2% in 2014 (from 15% in 2000), according to the IMF's Direction of Trade Statistics (DOTS) figures. The EU's share of ASEAN's imports also fell to 9.1% in 2014 from 11.2% in 2000. Still, these declines were less marked than those in the US and Japan. The EU is now a more important trading partner for ASEAN than either of the countries. ASEAN's exports to the US declined to 9.6% of total ASEAN exports in 2014, from 18.9% in 2000, whereas, its imports from Japan also fell to 8.7% of the total in 2014, from 19.3% in 2000, notes Standard Chartered.

ASEAN posted a trade surplus of USD 13.8bn with the EU in 2014, according to IMF DOTS. This was smaller than the trade surplus with the US (USD 31.5bn), but bigger than Japan's (USD 6.4bn). The EU trade deficit with ASEAN has narrowed over the past decade due to strong domestic demand in ASEAN. ASEAN imports from the EU grew much faster than its exports to the EU in 2010-14. The trend is most marked for the Philippines and Singapore, whose export growth to the EU has fallen sharply in recent years. ASEAN's merchandise trade balance was supported by Vietnam's exports, as all other economies in the region have registered deteriorating trade balances versus the EU in the past few years.