The significance of ASEAN as major powers recalibrate
Amid U.S.-China rivalry and Russian aggression, Southeast Asian countries are strengthening European partnerships to preserve strategic autonomy.
In a nutshell
- France and the EU are pursuing deeper ties to ASEAN through trade, defense
- China’s assertive maritime claims heighten sovereignty concerns
- ASEAN is diversifying partnerships to counter tariffs, geopolitical risks
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Southeast Asian nations find themselves in the spotlight as trade tensions with the United States rise, maritime disputes with China escalate and Russia continues its expansionist war on Ukraine. None of the 10 member countries of the Association of Southeast Asian Nations (ASEAN) wants to be overly reliant on any of these major powers. In July at their annual foreign ministers meeting, they concluded by saying that the countries would chart their “own course deliberately, coherently, and with purpose.”
The annual Shangri-La Dialogue defense summit in Singapore this year featured the usual discussions on regional security issues, including the crisis in Myanmar and the disputes in the South China Sea. But this year’s event was notable for its European element. Mr. Macron served as the keynote speaker, and clearly signaled France’s commitment to the region.
The EU and its member states are courting ASEAN in hopes the two blocs can forge closer ties.
President Macron advocated for a “third way” that provides an alternative for ASEAN members to avoid being overly dependent on either the U.S. or China. Amid the heightened rivalry between the two superpowers, he encouraged Southeast Asian and European countries to preserve strategic autonomy.
In recent years, relations between the two blocs and their members have deepened, with Malaysia, Thailand and the Philippines making progress in their discussions with Brussels over free trade agreements. The EU and ASEAN also held their 32nd Joint Cooperation Committee meeting in June, reaffirming a strategic partnership that was launched in 2020.
The twin goals of diversifying trade partners and maintaining stability in Southeast Asia are among the many reasons for France’s increasing interest in ASEAN. Not only does China’s position in the long-standing disputes in the South China Sea raise concerns for some ASEAN members, but also for Washington, Brussels and several European countries, including France. Europe, the Middle East and East Asia are all connected by sea, and when combined, the regions account for 30 percent of all global maritime traffic. Any issues in the South China Sea that affect the passage of ships to Europe could disrupt supply chains, leading to severe economic repercussions.
Yet China claims more than 90 percent of the disputed areas in the sea and has constructed military outposts on artificial islands there. The Chinese Navy and Coast Guard routinely harass vessels of littoral countries, namely those of the Philippines. China seeks to control nearly the entire sea despite a Hague tribunal’s ruling in 2016 in favor of the Philippines. The tribunal concluded that the so-called nine-dash line, a China-crafted demarcation to claim large swaths of the South China Sea, lacks legal standing. Beijing has disregarded the tribunal’s decision and persists in its aggressive activities, which Paris and others see as a threat to the rules-based international order, including the United Nations Convention on the Law of the Sea.
Trade and defense deals
With Southeast Asia emerging as a significant region for global commerce and in an effort to contribute to regional stability, President Macron embarked on a Southeast Asia tour in May to pursue trade partnerships.
His trip started in Vietnam, a former French colony. The visit was the first since he assumed office in 2017. The two nations concluded several cooperation agreements, collectively amounting to $10 billion. These included a substantial deal with Airbus, which involved VietJet, the largest private airline in Vietnam, acquiring 20 aircraft from the European manufacturer.
The visit also underscored France’s vision of the partnership as entailing reinforced defense cooperation. President Macron reiterated his support for freedom of navigation, a critical point for Hanoi in light of its overlapping claims with China in the South China Sea. France’s defense cooperation with Vietnam has the potential to enhance its military capabilities and help counterbalance China.
President Macron also visited Indonesia, ASEAN’s most populous country, prior to his participation in the Shangri-La Dialogue. The two countries commemorated the 75th anniversary of their bilateral relationship this year. Both leaders reaffirmed their dedication to the extension of their strategic partnership, which was established in 2011. They signed a letter of intent, encompassing Indonesian procurement of primary weaponry defense systems, including Rafale Fighter Jets by Dassault Aviation and Scorpene submarines manufactured by Naval Group.
The strengthening of defense relations was also evident in joint exercises such as the Garuda Guerrier and French naval participation in an Indonesian multilateral exercise, as well as Indonesia’s participation in the Bastille Day Parade 2025, where nearly 500 Indonesian troops participated in the ceremony.
ASEAN options in the Trump era
President Macron’s Southeast Asian tour took place amid rising trade tension with the U.S. Vietnam was initially subjected to 46 percent tariffs from Washington; however, the countries reached a deal to cut that figure to 20 percent. The agreement also included Vietnam’s opening of its market to American products.
Indonesia initially faced 32 percent tariffs on its exports to the U.S. However, after negotiations between the two countries, a new trade deal was announced in July where Jakarta agreed to eliminate nearly all tariffs on goods imported from the U.S., while its exports would be tariffed at a 19 percent rate.
With growing apprehension over unpredictable U.S. tariff policy, Indonesia has moved to strengthen its relationship with the EU in general, not only France. Following a decade of negotiations, the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA) was successfully concluded in July. Meanwhile, Indonesia’s trade surplus with the EU nearly doubled from $2.5 billion in 2023 to $4.5 billion the following year.
Import duties on Indonesian products entering Europe will likely be significantly reduced, by up to 80 percent, as a result of the agreement.
In 2024, the cumulative population of all ASEAN countries was 692 million, and they contributed 7.2 percent to global gross domestic product. Consequently, France is hardly alone in seeking a closer relationship with Southeast Asia. In addition to their defense and commerce partnerships, Russia and China are courting ASEAN members through BRICS, a loose affiliation of countries that serves as a counterweight to Western groupings such as the G7. Indonesia is the only ASEAN country that is a full member of BRICS.
While not all ASEAN member states are interested in joining the group, some countries, such as Thailand and Malaysia, appear to be exploring the possibility. Russia and China claim to want a BRICS currency to counter the power of the U.S. dollar. That prospect is far from becoming reality, however, and in the meantime they are urging BRICS countries to trade in local currencies, promoting independent payment mechanisms.
Read more on ASEAN
- ASEAN still torn over security challenges
- China’s slowdown exposes ASEAN reliance on Beijing
- Trump and the allure of BRICS: A Southeast Asian perspective
Western sanctions imposed on Moscow in the aftermath of Russia’s full-scale invasion of Ukraine in 2022 were a big factor in the Kremlin’s decision to look east. The trade turnover between Moscow and ASEAN reached $22 billion in 2023, a 14.6 percent increase from the previous year. That figure rose by 20.5 percent in the first half of 2024. A joint naval exercise in the Java Sea last year with the Indonesian and Russian navies was their first such mutual defense training event.
Historically, Vietnam, another ASEAN member, has been significantly dependent on Russia for its defense. Russia was the primary defense exporter to Southeast Asia from 2000 to 2019, with Vietnam accounting for 80 percent of the total, although in 2022 its share decreased to 60 percent.
Vietnam’s desire to reduce its dependence on a single defense supplier increased with Russia’s full-scale war on Ukraine. It has since strengthened its relationship with the U.S. through a comprehensive strategic partnership that includes enhanced defense cooperation. Still, Hanoi’s decision to abstain from voting on resolutions to the United Nations General Assembly that condemn Russia’s actions in Ukraine shows that Russia remains significant to Vietnam.
China has been ASEAN’s primary trading partner since 2020, and after U.S. tariffs were announced in May the two sides concluded additional negotiations for the ASEAN-China Free Trade Area 3.0. The chapters on digital and green economies, as well as supply chain connectivity, were included in this agreement, which must be ratified by each side. That is likely to happen by the end of 2025.
Scenarios
Likely: ASEAN to seek other partners while balancing the U.S., China and Russia
Indonesia has historically been distinguished by its nonaligned stance, which aims to preserve equilibrium between significant powers such as the U.S. and China. While the U.S.-Indonesia trade deal might affect the nuances of this approach, Indonesia’s core strategy of balancing relationships with various global partners is likely to continue. Deepening of relations with Europe is probable.
The U.S. tariff issue and maritime disputes with Beijing in the South China Sea have underscored the careful balancing that Jakarta and other ASEAN members are maintaining. Given the present global trade tension, it is more likely that the bloc will strive to maintain equal relations between the U.S. and China, as well as to avoid making decisions that may cause discord among its European counterparts.
American tariff uncertainties have indirectly encouraged France and Southeast Asia to strengthen their economic ties. As long as that uncertainty remains, other countries are likely to follow the same strategy. More and more European nations will likely strengthen their relationships with ASEAN members, particularly in the realm of defense partnerships, to counter China’s growing assertiveness and influence.
Unlikely: Closer Southeast Asian-European relations cause problems
Despite France being a U.S. ally, it is not a member of the Australia-United Kingdom-U.S. (AUKUS) pact nor the Quadrilateral Security Dialogue (the Quad), making it even more attractive for ASEAN member states as it means the bloc’s centrality principle is unlikely to be jeopardized by its close partnership with France.
Although some viewpoints highlight BRICS’s potential to upend the current Western-led order, its fundamental differences – which include national interests and political systems – make its domination unlikely.
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