EU, ASEAN to hold summit to develop supply chains

Hanoi - The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) will hold a summit of national leaders for the first time in December to discuss expanding trade and infrastructure assistance as the EU seeks to strengthen ties with ASEAN.

Japan’s Nikkei quoted an EU official as saying that the event will open in Brussels on December 14, during which both sides want to develop supply chains. The pandemic stalled imports of medical products and automobile components for the EU, which is expected to offer infrastructure aid and economic cooperation deals for Southeast Asian countries.

The EU will encourage Southeast Asian nations to fulfill a major role in the supply chain for the West, based on the idea of "friend-shoring" among nations.

The EU has free trade agreements in force with ASEAN member states such as Singapore and Vietnam, while looking to accelerate similar negotiations with Indonesia, the Philippines, Malaysia and Thailand.

The United Nations data showed that the EU and ASEAN traded 250 billion USD worth of goods last year. ASEAN is one of the major trading partners of the EU when combining all 10 member states, though the total figure is still less than China, the US and Russia in 2021.

An EU official said the EU will deepen cooperation with ASEAN on freedom of navigation in the East Sea and on export controls covering sensitive technology that can be used for military purposes. These efforts are based on the union's Indo-Pacific strategy adopted in 2021.

While Vietnam is working to spur economic recovery and development, international businesses are seeking stronger actions to develop supply chains to facilitate their future expansions.

Switching from a just-in-time to just-in-case trading model could help build supply chains through attracting investment and promoting linkages in both domestic and international networks.

Shanghai's grinding coronavirus lockdown is slowly clogging China's supply chains, as delays hit the world's busiest container port where staff are tangled in a morass of Covid controls.

With COVID-19 retreating, a return to normal was expected to happen soon around the world. Unfortunately, we are not yet there. Key macroeconomic disruptions stand in the way of the recovery: high inflation, surging commodity prices, supply shortages, tighter US monetary policy, and reduced fiscal support.