EU pledges $10bn investment in Southeast Asia during ASEAN summit

The EU has promised billions of dollars of investment in Southeast Asia, as leaders looked to bolster ties at a summit in the face of the Ukraine war and challenges from China.

The European Union hosted its first full summit with the Association of Southeast Asian Nations (ASEAN) in Brussels on Wednesday.

“There might be many, many miles that divide us, but there are much more values that unite us,” European Commission President Ursula von der Leyen told the gathered leaders.

But different opinions about Russia’s war in Ukraine and concerns about tensions with China over a key shipping route for global trade loomed over the meeting.

The EU has been on a diplomatic push to galvanise a global front against Moscow as its invasion has sent economic and political shock waves around the world.

ASEAN’s 10 nations – nine of which were represented, after Myanmar’s coup leaders were not invited – have been divided in their response to the Kremlin’s war on Ukraine.

Singapore has imposed some sanctions on Russia, while Vietnam and Laos, which have close military ties to Moscow, have remained more neutral.

Along with Thailand, they abstained from a United Nations vote in October condemning Russia’s attempted annexation of regions of Ukraine seized since February.

Final declaration

The diverging views led to intense wrangling over a final declaration from the summit.

The European Union was keen for a statement to describe the war in Ukraine as an act of aggression by Russia.

The final wording echoed that agreed by the leaders of the Group of 20 (G20) nations at a meeting chaired by Indonesia last month. Both said that “most members” condemned the war and recognised the human suffering it was causing.

“There were other views and different assessments of the situation and sanctions,” the EU-ASEAN statement said. “We continue to reaffirm, as for all nations, the need to respect the sovereignty, political independence, and territorial integrity of Ukraine.”

While Europe pressed for a tougher response to Russia, another global giant figured prominently at the summit.

China is ASEAN’s biggest trade partner, but its expansive claims over the South China Sea have created tensions with countries in Southeast Asia that also claim part of the key waterway including the Philippines and Vietnam, and sparked fears in Europe over the potential risk to trade.

The EU is eager to pitch itself as a reliable partner for the region’s dynamic economies amid the growing rivalry between Beijing and Washington.

The summit statement stressed the importance of peace in the South China Sea where China has created military bases and installations on artificial islands and rocky outcrops.

Europe’s vulnerabilities

The EU and ASEAN are already each other’s third-largest trading partner, and EU nations are pushing to diversify key supply chains away from China as the war in Ukraine underlines Europe’s vulnerabilities.

Von der Leyen offered an investment package over the next five years worth 10 billion euros ($10.6bn) under the EU’s Global Gateway strategy designed as a counterweight to China’s largesse.

“There is a battle of offers today in the geopolitical arena, not only a battle of narrative,” said EU foreign policy chief Josep Borrell. “We have to offer more.”

ASEAN and the EU suspended their push for a joint trade deal more than 10 years ago, but the bloc’s top officials said they hoped to relaunch efforts for a broad agreement.

So far, deals with Vietnam and Singapore are in place, and the EU is looking now to make progress with Indonesia, ASEAN’s largest economy, and to resume talks with Malaysia, the Philippines and Thailand.

One issue that risked clouding discussions was a new law in Indonesia criminalising sex outside marriage that has sparked fears for foreign visitors to the country.

Indonesia’s President Joko Widodo insisted though that the EU-ASEAN relationship needed to be based more on “equality”.

“There must be no imposition of views,” he said. “There must not be one who dictates over the other and thinks that my standard is better than yours.”

The closing statement also expressed deep concern about the February 2021 military coup in Myanmar, which has led to the deaths of thousands of civilians and increasing conflict, and “grave concern” about instability on the Korean peninsula.