ASEAN-EU at 50: Turning Goodwill into Strategic Tech Cooperation

Continuing fragmentation of the international order, marked by China’s assertive      pursuit of geopolitical interests coupled with weaponising supply chains and the US’ mercantilist trade policy, provides the ASEAN-EU relationship with increased strategic relevance as both sides have a shared interest in preserving the rules-based global order. The 50th anniversary of the ASEAN-EU Dialogue Partnership in 2027 gives both sides an opportunity to redefine the region-to-region relationship and make it fit for the age of geopolitical fragmentation. The relationship was upgraded into a Strategic Partnership in 2020, showcasing that ASEAN and the EU have already built a strong foundation of goodwill. In the latest State of Southeast Asia survey by ISEAS, 56 per cent of Southeast Asian respondents perceived the EU to be a trustworthy external actor second only to Japan. Moreover, 20.5 per cent of respondents view the EU as a strong champion of the rules-based international order after ASEAN and the US, while 19.2 per cent view it as a leader in championing global free trade, after ASEAN and China. More importantly, the EU is regarded as the most preferred third-party hedge against uncertainties created by ongoing US-China geopolitical tensions.      

However, this alone does not make the partnership a strategic one. The EU ranked fourth in terms of strategic relevance (behind the US, China and Japan), and only 3 per cent of respondents pointed to the EU as the most influential economic power in Southeast Asia. The gap between positive perceptions and actual influence persists despite robust economic ties and the current push to conclude new free trade agreements (FTAs), such as those with Indonesia (negotiations finalised in 2025) and the Philippines (negotiations substantially concluded as of September 2026), complementing pre-existing FTAs with Singapore (in force since 2019; with subsequent conclusion of Digital Trade Agreement in 2026) and Vietnam (in force since 2020).

These contradictory perceptions of the EU are only matched by how the EU has been approaching the region in the past couple of years. Recognising the need to de-risk from China, the EU has catalysed the pursuit of FTAs with ASEAN member states (AMS). External pressures have spurred increasing recognition of ASEAN’s strategic relevance for the EU. Successful and long-term sustainable relations, however, require moving beyond ASEAN as an object in the EU’s de-risking goals. Instead, the EU needs to approach the bloc as an equal partner. Brussels should formulate cooperation projects that reflect not just the EU’s own priorities, but also individual AMS’ interests and developmental needs.

The oft-used adage is that showing up is half the battle won. This rings true in the realm of foreign relations. The April 2026 ministerial meeting in Brunei Darussalam should serve as a cautionary tale. The outcome statement contains many positive mentions of commitments “to deepen relations based on international law, mutual interest, mutual benefit and equality” and “deepening trade and investment cooperation.” But the attendance sheet tells a different story altogether. From the EU’s side, the ministerial meeting was attended by only a few ministers, with several member states being represented merely on an ambassadorial level. Come next year’s 50th anniversary summit, the EU must do better.

Long-term cooperation on digital trade and technological development promises to deliver tangible benefits to both sides. Three areas are particularly worth noting: trade in digital services, artificial intelligence (AI) cooperation and semiconductors. Here, potential exists for both established multinationals as well as startups and Small and Medium Enterprises (SMEs) alike.

The EU is already a key partner for ASEAN in trade in digitally deliverable services, being ASEAN’s largest export market and 2nd-largest source of imports. With the negotiations on the ASEAN Digital Economy Framework Agreement (DEFA) concluded, ASEAN’s digital market is expected to grow from around US$400 billion to US$2 trillion by 2030. Resulting changes in the regulatory landscape of Southeast Asia mean that DEFA will fundamentally alter the conditions under which EU businesses operate in the region. However, this exercise in regulatory convergence will only be as successful as individual AMS’ ability to transpose DEFA into domestic regulations, ensure sufficient enforcement capacity and establish appropriate information-sharing and capacity-building mechanisms so as to achieve a consistent interpretation and application of the DEFA’s norms.

Here, the EU can offer the technical assistance needed by supporting the development and implementation of national legislation in key areas, including digital platforms competition, artificial intelligence, digital payments and crypto assets trade, and protection of personal data and other privacy frameworks to improve compatibility with relevant EU regulations. This can also include support for establishing and strengthening national regulatory bodies in AMS, such as personal data protection or competition authorities, as well as platforms for regulatory dialogue (for example, modeled after the EU Data Protection Board) with the aim of promoting intra-ASEAN regulatory synergy. This would help to promote further growth of digital trade with the EU, as synergistic regulation would reduce the costs of compliance for the sake of market entry.

On a business level, opportunities exist both on the software and hardware side of the digital economy. While the EU is not really thought of as a major AI power when it comes to the development of frontier Large Language Models (LLMs), its strength lies in application. This is an area where both sides can benefit, as seen in projects that are already happening. For instance, French defence contractor Thales works with the Singaporean Navy on developing autonomous de-mining systems; Siemens works with A*STAR, Singapore’s main Research & Development (R&D) agency, on the development of industrial AI. Temasek, a sovereign wealth fund of Singapore, has also backed European start-ups like Black Forest Labs, a German AI lab which received US$300 million in Series B funding. Meanwhile, in Malaysia, European companies enable the build-up of data centres by delivering the necessary technologies (Nokia and Ericsson) as well as clean energy (TotalEnergies).

Semiconductors provide another area of complementarity. ASEAN is embedded in global chip supply chains as an important intermediate and final manufacturing hub, while Europe retains strengths in manufacturing equipment, automotive chips and R&D. Cooperation should focus on European investment in higher-value production, joint research, workforce development and critical materials, helping ASEAN move up the value chain while diversifying Europe’s supply chains. These pursuits have been spurring a fast-paced increase in European chips-related investment in ASEAN. Since 2020, at least 26 new investment projects across ASEAN by European semiconductor companies have been announced or implemented, chiefly targeting Malaysia, Singapore and Vietnam, but also, to a lesser extent, Indonesia and the Philippines. ASEAN companies are also investing in Europe. According to the EU Chips Ecosystem Tracker, there are at least 13 entities owned by Singaporean investors in Europe, followed by two with ultimate corporate owners from Malaysia and one with an ultimate corporate owner from the Philippines.

Strategically, neither ASEAN nor the EU can fully insulate itself from US-China competition. But this does not mean that both cannot increase their manoeuvring space by building deeper economic ties with each other. Focusing on cooperation in critical technologies, like chips and AI, offers a way to do so without pursuing unrealistic self-sufficiency or forcing either side into exclusive arrangements.

The strategic value of such cooperation lies in creating additional options: alternative export markets, new investment sources, technological partnerships and supply-chain linkages. On one hand, increased ASEAN-EU interdependence will create new development and business opportunities. On the other hand, such interdependence will also provide the added benefit of diversification for the purpose of improved economic security.

Editor’s Note:
ASEANFocus+ articles are timely and critical insight pieces published by the ASEAN Studies Centre. The ASEAN@60 Special Edition series marks the organisation’s 60th anniversary in 2027 and highlights the key issues that will shape ASEAN and Southeast Asia as the organisation enters its seventh decade.