Europe Eyes Investment in Asia as the US Withdraws
Europe has completed different trade agreements with Asian countries. This comes in the backdrop of the US backing off from Asian trade deals due to its “America first” agenda.
Coupled with entering into trade deals with Japan, Singapore, Vietnam, the European Union is currently negotiating deals with China and Indonesia.
These trade deals will significantly increase two-way trade between the two regions. This represents a growing influence of EU in the Asian region, replacing the vacuum created by backing of the US.
According to the EU Ambassador, the EU wants to continue to form trade alliances with US, despite the ongoing US trade war with China. He also said that the EU wants to play a major role in the development of the regional economy that is going to grow significantly over the years.
EU’s trade partnership with regional Asian nations such as Indonesia will result in an increase in exports of the respective nations. It will result in influx of European carmakers and machinery products into Asia, and fisheries and textiles products into Europe.
Signing of the trade pact between the EU and Asian nations will boost trade between the two regions. It will also promote economic growth through influx of investment in Asia and boost overall infrastructure spending.
The trade deal will provide EU companies access to infrastructure and procurement projects that have been rolled out by respective countries in Asia.
New Investment Direction
The recently concluded EU trade deals with Asian countries cover different sectors and industries. The trade deal covers sustainable development, competition, environment, and labour laws, among others.
The new EU trade deal with Asian nations will compare with the Trans-Pacific Partnership (TTP) in ambition. It will result in mutual benefits for the respective nations in Asia and the EU.
Regarding the trade deal with Indonesia, tariffs are expected to be cut down to 95 percent. This will lead to increased trade between the two regions, benefiting consumers due to lower prices. The trade deal will also help push FDI in Indonesia that has declined by nearly 20 percent as compared to a year earlier.
Free trade between the EU and the Asian nations will help spur economic growth and investment in Asia, thereby resulting in increased job opportunity and demands for goods. It will also minimize the blow to respective economies due to the US trade war with EU and Asian nations.