Progress towards a free trade agreement (FTA) between the European Union (EU) and the Philippines has renewed attention on the EU’s ongoing negotiations with Malaysia and Thailand, as business leaders push for stronger trade and investment links between Europe and ASEAN.
European and ASEAN business representatives welcomed the substantial agreement reached by the EU and the Philippines at the 12th ASEAN-EU Business Summit in Manila on Tuesday, urging both sides to maintain momentum towards its expected ratification in 2027.
The agreement has yet to enter into force. Negotiations must be formally concluded before the text undergoes legal review, translation, signature and parliamentary approval.
Malaysia Investment, Trade and Industry Deputy Minister Sim Tze Tzin said the country is positioned to pursue deeper industrial collaboration with European companies, particularly in engineering and advanced manufacturing.
“We are no longer a cheap manufacturing base. Our engineers and manufacturers are ready for deeper collaboration,” he said at the summit.
Sim highlighted opportunities for joint ventures combining European technology with Malaysian engineering capabilities, allowing companies to access markets across Southeast Asia and beyond.
The comments come as Malaysia continues negotiations on its own FTA with the EU, alongside Thailand.
European Commission Director-General for Trade and Economic Security Ditte Juul Jørgensen said the EU is pursuing bilateral trade agreements with ASEAN member states as building blocks towards the longer-term objective of a region-to-region agreement.
ASEAN Deputy Secretary-General Satvinder Singh noted that European businesses continue to express strong interest in a comprehensive ASEAN-EU FTA, which has yet to be established.
EU-ASEAN Business Council Executive Director Chris Humphrey said the Philippines agreement would provide businesses with a more predictable trading environment amid global uncertainty.
However, he stressed that trade agreements alone would not guarantee investment, with companies also considering access to financing, payment arrangements and workforce availability before committing capital.
Discussions at the summit focused on translating trade commitments into investment, employment and stronger regional supply chains.
Philippine trade officials identified electronics, semiconductors and digital services as sectors that could benefit from closer European investment, particularly through the participation of small and medium enterprises in higher-value supply chains.
Beyond trade, participants examined opportunities in energy transition financing, cross-border payments, digital infrastructure and healthcare.
The summit, jointly organised by the EU-ASEAN Business Council and the European Chamber of Commerce of the Philippines, attracted more than 200 participants from government, business and multilateral institutions.
For Malaysia, the developments place attention on the progress of its own EU trade negotiations and the potential for greater European participation in the country’s manufacturing and technology sectors.
