Global Lens

After the deal signed with Indonesia, Brussels aims to conclude other negotiations. By 2026, agreements with Thailand, the Philippines, and Malaysia could be finalized

Di Alessandro Forte

September 23, 2025 adds another piece to the long and complex puzzle of bilateral relations between the European Union and ASEAN countries: Commission President Von der Leyen and Indonesian President Subianto have concluded a Free Trade Agreement (FTA) and an Investment Protection Agreement (IPA) after nine years of negotiations, pending formal approval by the Member States and the European Parliament. This agreement fits into a much broader political and commercial framework for Brussels, which views the region as not only a solid economic partner, but above all a strategic opportunity. In 2024, ASEAN confirmed its role as the EU’s third-largest trading partner, with a goods exchange worth €258.7 billion (9.6% of the Asian bloc’s total trade), and stands out as a crucial manufacturing and logistics hub for access to the Indo-Pacific area, serving as a bridge between advanced and developing economies, and as a key node in supply chains—among them electronics and automotive. 

In this context, Jakarta and Brussels agreed to eliminate tariffs on more than 90% of products as soon as the deal enters into force, including the 50% tariffs on EU automobiles, which will be gradually phased out within five years. The Indonesian president, in this regard, expressed confidence that these conditions will double bilateral trade within the first five years. 

Moreover, the newly signed agreement marks the third achievement rewarding the EU’s bilateral approach toward ASEAN countries. Indeed, after the attempt in 2007 to negotiate a region-to-region agreement, the process stalled and was suspended in 2009 due to regulatory heterogeneity among Southeast Asian countries. This, however, did not prevent Brussels from concluding FTAs with Singapore in 2019—with an IPA pending ratification—and with Vietnam in 2020, opening up broader product and service diversification in the region. From a strategic standpoint, the Singapore–Indonesia pairing—respectively a services champion and a demographic powerhouse rich in raw materials—inevitably sends a positive signal for the negotiations that are still on hold. 

For Thailand, ASEAN’s automotive hub, the Indonesian precedent on progressive tariff dismantling in the sector acts as a regulatory facilitator, reducing investment uncertainty and opening the door to a more realistic and extensive integration of regional value chains. For Malaysia, the world’s second-largest palm oil producer after Jakarta, the removal of EU tariffs on the product creates a more attractive negotiating scenario, while maintaining European standards on food safety and sustainability. For the Philippines, where services account for 63.2% of GDP, an FTA modeled after the Singapore deal would bring interoperability in digital services, streamlined procedures for licensing and payments, and common frameworks for fintech and open banking, making EU market access more immediate for Filipino operators.

One question remains: does a regional EU–ASEAN agreement still make sense? The short answer is yes—but not in the immediate future. The bilateral path, however, should not be seen as an alternative to a region-to-region deal, but rather as a pragmatic way to gradually align agreements with other Southeast Asian countries, building a broader framework that lowers compliance costs for businesses and strengthens ASEAN integration. In the medium term, this could certainly create fertile ground for a credible regional agreement. The global context, moreover, pushes in the same direction: amid rising U.S. tariffs and persistent dependence on the Chinese market, for both the EU and ASEAN, supply chain diversification is no longer an option, but a strategic necessity. Hence the urgency of transforming bilateral progress into a shared roadmap, with concrete objectives and defined timelines.

The most distinctive feature of Italy’s approach to the Indo-Pacific lies in the depth with which it seeks to expand relations with Southeast Asian countries: almost a unicum in Europe

By Emanuele Ballestracci

When, in 2008, the Obama administration inaugurated a new era of American foreign policy with the now famous “Pivot to Asia,” few would have imagined that little more than a decade later Europe would also partially follow in its footsteps. The Indo-Pacific region — whose precise geographical boundaries vary depending on the parameters adopted by each actor — is increasingly at the center of the European Union’s and its member states’ strategic interests. Since 2018, the year France published its Indo-Pacific strategy, these interests have taken shape in policy documents drafted by European governments. The Netherlands, Germany, the United Kingdom, the Czech Republic, and Lithuania — as well as the EU itself — have all followed France’s example. Italy, however, still lacks an official strategy, though parliamentary work to define one began in 2023.

Although it does not yet have a fully codified framework and lacks the resources of powers with a stable presence such as the United Kingdom and France, Italy’s commitment to the Indo-Pacific has nevertheless helped position Rome as a credible partner for regional actors. For more than fifteen years, Italy has deepened its ties with the region through a multidimensional and consistent approach, despite the proverbial discontinuity of its governments.

A turning point in Italy’s Indo-Pacific trajectory came in 2007, when Rome joined the Pacific Islands Forum as a Dialogue Partner — after France and the United Kingdom, but before Germany and Spain. Since then, Italy has expanded a network of strategic partnerships with its traditional regional allies: with South Korea in 2018, and with India and Japan in 2023, followed in 2024 by Joint Strategic Action Plans with New Delhi and Tokyo. In 2019 it also joined the Indian Ocean Rim Association (IORA) as a Dialogue Partner, one of only three European countries to do so.

On the defense front, industrial and military cooperation have emerged as crucial areas, particularly with the launch in 2022 of the Global Combat Air Programme (GCAP), a trilateral partnership with the United Kingdom and Japan to develop a sixth-generation fighter jet. Over the past decade, the Italian Navy has also carried out regular missions in the area: the frigate Carabiniere in 2017, ITS Morosini in 2023, ITS Montecuccoli and F-35As in Japan in 2024, and ITS Antonio Marceglia in 2025. Italy also took part in Operation AGENOR — the European maritime security initiative in the Strait of Hormuz — from July 2022 to January 2023, assuming command and contributing two frigates and air assets.

The most significant peculiarity of Italy’s approach, however, lies in the depth with which Rome has extended its relations with Southeast Asian countries — almost a unicum compared with the orientations of other European countries such as the Netherlands and Germany. These latter tend to emphasize cooperation with “like-minded partners” — the United States, Japan, South Korea, India, and Australia — to strengthen their regional presence, while the United Kingdom relies heavily on minilateral forums that exclude ASEAN.

Italy, instead, has significantly reinforced its engagement with Southeast Asia, launching collaborations and consolidating partnerships on multiple levels. Memoranda of Understanding of an economic nature have been signed with Indonesia and Thailand, while in 2020 Rome became an ASEAN Development Partner. Italian companies have also worked with Vietnam, Indonesia, and Thailand in supplying machinery and industrial equipment for manufacturing modernization, and have developed projects with the Philippines and Malaysia in renewable energy and climate transition. ASEAN was also identified as a strategic priority in the “Action Plan for Italian Exports to High-Potential Extra-EU Markets” presented in June 2025, with Italian exports reaching €10.7 billion in 2024 — a 10.3% increase over the previous year.

In this context, the strengthening of ties with Malaysia is emblematic: the visit of Prime Minister Anwar Ibrahim to Rome in July 2025, culminating in a summit with Prime Minister Giorgia Meloni, marked the evolution of relations with Putrajaya into a strategic partnership. Italy-Malaysia relations have consolidated across all levels, thanks also to contributions from the private sector and Italian giants such as Leonardo, Fincantieri, and Eni. Relations with Indonesia have also grown significantly: in 2024 the country became the main importer of Italian armaments, with acquisitions worth €1.25 billion and a historic contract with Fincantieri and Leonardo for two multipurpose patrol vessels. Rumors have also circulated about possible new agreements, including the sale of the aircraft carrier Garibaldi.

Deepening relations with ASEAN countries thus constitutes a cornerstone of Italy’s renewed interest in the Indo-Pacific. Alongside cooperation with traditional partners, Rome has in fact significantly strengthened its ties with Southeast Asian capitals on diplomatic, economic, and defense levels. This approach differs from that of other European actors, even though both the EU and ASEAN are united in their support for principles such as multilateralism and the centrality of international law. 

Trump-era tariffs have also targeted Southeast Asia, pushing the region’s countries to seek agreements with Washington

By Anna Affranio

With the expiration of the trade truce symbolically set for July 8, the United States and ASEAN find themselves at a critical juncture. The announcement made on April 2—referred to as “Liberation Day” by the Trump administration’s rhetoric—has reignited tensions: Washington has announced its intention to impose tariffs on a wide range of products from, among others, Southeast Asian countries. 

Specifically, the tariffs would affect Cambodia the most (with duties up to 49%), followed by Laos (48%), Vietnam (46%), Myanmar (44%), Thailand (36%), and Indonesia (32%). Malaysia, Brunei, the Philippines, and Singapore would instead be subject to lower tariffs, ranging from 10% to 24% (according to an official source). According to Washington, these measures are meant to correct trade imbalances and protect domestic industries, particularly in the electronics, agri-food, and automotive sectors.

For many ASEAN countries, however, tariffs of this magnitude pose a serious risk to their economic model, which heavily relies on exports. For many of them, the United States is the primary export market. Moreover, in recent years, due to trade tensions between Beijing and Washington, the region has attracted massive investments from multinational companies seeking to reduce their dependency on China—a strategic position now threatened by the newly introduced tariffs. 

In an attempt to mitigate the damage ahead of the deadline, both multilateral and bilateral negotiations are underway. A multilateral summit between the United States and the entire ASEAN bloc is being arranged, with Singapore, Indonesia, and Vietnam pushing for an extension of the tariff truce—at least for the most sensitive tech sectors. At the same time, Malaysia, which holds the rotating ASEAN chair, has proposed an extraordinary summit with Donald Trump, aiming for a high-level political agreement.

On the bilateral front, individual ASEAN countries like Cambodia, Vietnam, and Thailand are conducting separate negotiations with the U.S. to handle tariffs in a more targeted and flexible manner. As for Vietnam, multiple negotiation rounds have already taken place, focusing on textile and electronics exports. Hanoi has pledged stricter controls against illegal transshipments of Chinese goods and has shown openness to increasing imports of U.S. products. The leader of the Vietnamese Communist Party, To Lam, was among the first foreign leaders to speak with the White House after “Liberation Day” and is directly involved in the negotiations. Thailand has also taken action. Its government was among the first to set up a technical team to negotiate a reduction of the current 36% tariff. Bangkok has submitted a proposal that includes expanding market access for American products and Thai investments in the U.S., potentially creating American jobs in return. According to the optimistic view of Thailand’s Minister of Commerce, negotiations could bring the tariff down to 10%. However, no official agreements have been signed yet. Cambodia, the hardest-hit by the tariffs and with exports to the U.S. accounting for about 38% of its total exports—mainly clothing and footwear—has responded similarly. Fearing severe economic and social consequences, its government has already held two rounds of virtual talks with Washington and aims to launch direct negotiations soon. As a goodwill gesture, Phnom Penh has cut import duties on 19 categories of U.S. products, reducing them from as high as 35% to around 5%, and has strengthened internal controls to prevent potential fraudulent export practices.

Meanwhile, China is watching and acting. Beijing has recently updated its free trade agreement with the entire ASEAN bloc and continues to strengthen cooperation with the region in infrastructure, logistics, and energy. The goal is clear: to present itself as a stable and predictable partner, in contrast to the more volatile and aggressive American trade approach.

Three scenarios are most likely: a technical extension of the truce for a few months, an immediate return to full tariffs, or an intermediate solution involving sectoral exemptions and quarterly monitoring. In any case, the risk is that ASEAN may emerge from this period more fragmented, as each country might pursue separate and independent negotiations with the U.S. This could have far-reaching consequences for supply chains, foreign investment, and the region’s overall geopolitical positioning.

The decisions made in the coming weeks will have long-term effects not only on ASEAN’s economy but also on the entire commercial architecture of the Asia-Pacific region.

I dati del 2024: record per la crescita delle esportazioni Made in Italy in Vietnam

Il rialzo dei dazi da parte degli Stati Uniti potrebbe avere effetti positivi per l’export italiano, soprattutto da parte dei mercati emergenti. Secondo un approfondimento messo a punto dalla Farnesina, dopo la riunione presieduta dal ministro Antonio Tajani con alcuni rappresentanti del tessuto produttivo italiano, un ruolo importante potrebbe avere l’apprezzamento del dollaro sull’euro, verificatosi negli ultimi mesi, unito all’aumento delle scorte di merci da parte delle imprese americane. Anche misure tariffarie più elevate contro Cina e Messico potrebbero avere effetti opposti, aprendo spazi competitivi per il Made in Italy. In particolare, segnala la Farnesina, importanti opportunità per l’export italiano vengono dai mercati emergenti: Mercosur, India, ASEAN, Paesi del Golfo, Africa e Balcani. Le esportazioni italiane nella regione ASEAN hanno raggiunto 9,7 miliardi di euro nel 2023, con una crescita del 5,1%, confermata da un’ulteriore +11% nel 2024. I settori trainanti sono macchinari, chimica, tessile e agroalimentare. Sebbene il saldo commerciale sia negativo, il deficit si è progressivamente ridotto grazie alla crescente competitività del Made in Italy. Nello specifico, nel 2024 l’aumento più significativo è quello verso il Vietnam, dove si registra un ragguardevole +25%. La crescita riguarda anche gli altri Paesi dell’ASEAN e il dato è una chiara testimonianza della crescente apertura del mercato asiatico, che continua a rappresentare una frontiera chiave per l’industria italiana. Il trend si sta addirittura intensificando, visto che il solo dato di dicembre 2024 è addirittura di un aumento del 39,9%. Negli ultimi sei anni, l’interscambio commerciale complessivo tra Italia e ASEAN è cresciuto circa del 40%, più di Regno Unito, Germania e Francia, evidenziando il grande dinamismo delle relazioni economiche Italia-ASEAN. Gli strumenti di cooperazione economica tra l’ASEAN e l’Italia sono diversi e sfaccettati. Comprendono accordi commerciali, trattati di investimento, joint venture e programmi di cooperazione economica e tecnica. Questi strumenti mirano a ridurre le barriere commerciali, a promuovere gli investimenti, a favorire il trasferimento di tecnologia e a rafforzare i legami economici tra le due regioni. Insieme, costruiscono partenariati economici resistenti e reciprocamente vantaggiosi. Ad oggi, gli IDE italiani nell’ASEAN valgono 7,7 miliardi di euro, mentre gli IDE ASEAN ammontano a più di 800 milioni di euro. Si tratta di aumenti esponenziali da quando è stata fondata l’Associazione Italia-ASEAN. 

ASEAN's approved policy paper on combating climate change, a pathfinder for participation in the ongoing summit in Baku

ASEAN member countries express deep concern about the continued rise in global greenhouse gas emissions and the consequence of increased climate risks and impacts on natural and human systems, which remains a significant threat to ecological diversity in the ASEAN region and, in general, to the sustainability of the development gains we have achieved to date. We want to draw attention to the cost of climate change to ASEAN economies, which represents an estimated economic loss of $97.3 billion between 2009-2020 and an estimated adaptation cost of $422 billion through 2030 for the region. We want to highlight the significant progress and new opportunities provided by COP28 and the UAE Consensus to ensure a stable climate, which is an important basis for sustaining development gains in the ASEAN region, taking into account the common but differentiated responsibilities of ASEAN States Parties. For this reason, we call for accelerated implementation of climate action and financial mechanisms under the UNFCCC as evidence of commitment to climate action and rapid and equitable energy transition. We call for recognition of persistent gaps in the implementation of ambitious agreed climate actions, including mitigation, adaptation and finance. And we look forward to the fulfillment of the means of implementation as committed by developed countries, namely finance, technology development and transfer, and capacity building, including the development and implementation of low-emission technologies and enabling infrastructure, which are critical to our transition to a regional low-carbon economy and to ensuring the ability of ASEAN and developing countries to access climate finance. We also look forward to the implementation of decisions taken at previous COPs to strengthen financial support for climate action in developing countries. We also call for recognition of the potential contributions of ASEAN member states through emission avoidance, emission reductions, emission removals, and carbon stock enhancement, depending on scientific and technological advances, international cooperation, and increased support from developed countries, including relevant initiatives related to carbon markets by ASEAN member states to serve as a model for an integrated approach to sustainable development and climate resilience in the region.

In recent years, bilateral trade and direct investment have increased exponentially, thanks in part to the HLD. Now there is room for further growth

Economic relations between Italy and ASEAN are continuously deepening. The High Level DIalogue on ASEAN Italy Economic Relations 2024, which took place on November 5 and 6 in Manila, was an opportunity to highlight the current state of relations and discuss how to further strengthen them. As shown in the position paper published by The European House Ambrosetti at the event, the ASEAN-Italy trade interchange is worth more than $20 billion, of which $9.7 billion is represented by Italian exports to ASEAN and $12 billion refers to ASEAN exports to Italy. In the past six years, the total trade interchange between Italy and ASEAN has grown by 38 percent, more than the United Kingdom, Germany and France, highlighting the great dynamism of Italy-ASEAN economic relations.

The instruments of economic cooperation between ASEAN and Italy are diverse and multifaceted. They include trade agreements, investment treaties, joint ventures and economic and technical cooperation programs. These instruments aim to reduce trade barriers, promote investment, foster technology transfer and strengthen economic ties between the two regions. Together, they build resilient and mutually beneficial economic partnerships. To date, Italian FDI in ASEAN is worth 7.7 billion euros, while ASEAN FDI amounts to more than 800 million euros. These are exponential increases since the HLD editions began and since the Italy-ASEAN Association was founded. 

As Lorenzo Tavazzi, Senior Partner and Board Member of The European House Ambrosetti, points out in his position paper, the concrete results achieved in recent years are remarkable. A few examples? The opening of production units, design and service centers in Vietnam, Thailand and Indonesia by an Italian company operating in the metallurgical sector; the opening of a production plant by 2 Italian motorcycle manufacturers in Thailand and Indonesia; the inauguration of a new tire production plant in Thailand; the acquisition of a minority stake in an Italian cosmetics manufacturer by a sovereign wealth fund owned by the Singapore government; the increase in exports of Made in Italy products to ASEAN, particularly to Singapore, Malaysia, Thailand and Vietnam; and the introduction of training and business courses for access to the ASEAN market offered by Italian government agencies.

There is enormous potential for growth in some areas. For example on digital. ASEAN today has different levels of digital and environmental preparedness and is prioritizing green growth and technology adoption, with the goal of improving regional competitiveness, especially through the deployment of artificial intelligence, a robust startup ecosystem, and 5G infrastructure. Italy, with its strong industrial base and advanced technologies, is focusing on clean energy, sustainable practices and digitization to boost economic growth and resilience and can help increase ASEAN competitiveness. As ASEAN countries continue to prioritize resilience and innovation, high-tech sectors such as space offer critical support to ensure business continuity, regional stability, and cooperation in a highly strategic sector. Italy, renowned for its expertise in advanced technology and research, has much to contribute to ASEAN's growth in these areas. The potential for joint projects, technology transfer and knowledge sharing is significant and offers both regions unique advantages of collaboration. Not surprisingly, just in the past few weeks the ASEAN-Italy Cooperation Initiative on Space and Smart Technologies project was concluded with an event at the headquarters of the Italian Space Agency (ASI) in Rome. The initiative, financed by the Ministry of Foreign Affairs and International Cooperation, Directorate General for Globalization and Global Issues, is part of the formal framework of the partnership stipulated between MAECI and the ASEAN Secretariat and called ASEAN-Italy Development Partnership (2022-2026). And it aims among other things to create business opportunities, increase international presence, and improve scientific knowledge based on shared experiences, best practices and lessons learned.