European businesses push for EU-ASEAN regional free trade agreement

European businesses are advocating for a region-to-region free trade agreement (FTA) between the European Union and ASEAN to improve competitiveness. According to the 2026 EU-ASEAN Business Sentiment Survey, nearly 75% of respondents believe a regional pact would offer greater advantages than the current patchwork of bilateral deals. Many businesses reported feeling at a disadvantage compared to competitors from nations that already hold trade agreements with ASEAN.

In Indonesia, the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is viewed as a potential windfall. Analysts suggest the agreement could provide a 'double advantage' for Indonesia, positioning the country as a manufacturing hub for European companies seeking alternatives to other markets. This could drive foreign direct investment and strengthen supply chains, particularly in sectors like automotive and electric vehicle commodities, serving as a counterbalance to geopolitical risks.