European Union undermining its trade with south-east Asia: Report

Brussels [Belgium], April 16 : After decades of support for globalization and free trade, the European Union (EU), in recent times has started adopting an inward approach which is impacting its trade with south-east Asia in particular, a media report said.
In the 2022 State of Southeast Asia survey, produced annually by the ISEAS-Yusof Ishak Institute in Singapore, when the region's opinion-formers were asked who they considered the leading champion of free trade, the EU fell to fourth place, several percentage points behind China, Asia Times reported.
The fall in EU's approval ratings with regard to free trade is an ongoing trend since 2019 with analysts pointing out that the fall in ratings stems from the EU's own actions, the report said.
In the 2021 State of Southeast Asia survey, some 29.5 per cent of Indonesian respondents said the EU was the main champion of global free trade, the highest share of any country. Trust fell to only 12.2 per cent in the 2022 survey.
"The European Union's non-tariff barriers are often seen by critics as mercantilist, protectionist measures by proxy," Rahul Mishra, a senior lecturer at the University of Malaya's Asia-Europe Institute was quoted as saying.
In mid-March, Brussels increased tariffs on stainless steel products from Indonesia after alleging that they benefited from unfair subsidies, including some from China's Belt and Road investment program.
On top of existing anti-dumping tariffs, Indonesia will now face an overall tariff of 30.7 per cent, up from 21.4 per cent previously.
Jakarta denied its firms received uncompetitive subsidies, including from China, and charged the EU investigation with not listening to the arguments put forward by Indonesia's diplomats the report said.
Previously in 2019, the EU slapped what were ostensibly protectionist tariffs on imports of certain types of rice from Cambodia and Myanmar after protests from farmers in Italy and Spain which lasted from early 2019 until January 2022.
Estimates put the overall drop in imports from Cambodia and Myanmar to about 41 per cent in the 2020-2021 period, the lowest level in the last eight marketing years.
However, arguably the biggest bust-up over free trade has come from the EU's plans to phase out palm oil imports, a particular problem for Indonesia and Malaysia, the world's two largest exporters of the product commonly used for biofuel.
The EU asserts that palm oil production is unsustainable and is a major driver of deforestation. Jakarta and Kuala Lumpur counter that they are making their palm oil sector more sustainable, and contest claims that it has such a drastic impact on deforestation as Brussels claims, the report said.
Both Southeast Asian countries have threatened to take their case against the EU to the World Trade Organization (WTO) over what they consider to be a protectionist move to help Europe's own vegetable oil producers, the report further said.
As a result of the recent protectionist measures, it is little surprise that the EU's image as a defender of free trade has been dented the most in the Southeast Asian countries on which it has slapped protectionist tariffs.
Igor Driesmans, the EU ambassador to the ASEAN bloc, when asked about the protectionist measures, responded that in all of these cases when faced with unfair trade practices, the EU acted within the rules of the WTO.
"The EU remains a great supporter of free trade, multilateralism, and the rules-based international order," Driesmans stated as quoted by Asia Times.
Lately, the war in Ukraine has precipitated "an end to the globalization we have experienced over the last three decades," Larry Fink, the chief executive of BlackRock, the world's largest asset management company was quoted.
Decoupling from Russia is underway, but there are many in Europe who argue that the EU needs to look at its trade relations with other states that could potentially up-turn the global order, the report said.
Similar to US President Donald Trump's "trade war" with China that started in 2018, this could benefit Southeast Asian economies, especially if decoupling means moving European investments and import contracts away from China, the report said.
On the other hand, it could imperil the basis of global free trade as we've known it since the early 1990s, a system that has allowed ASEAN's share of global GDP to surge from 1.5% in 1990 to 3.7% by 2019, according to World Bank data.