We’ve spoken with leading CEOs about the lessons of the past year, their strategic priorities and their hopes for UK business.
Why UK CEOs should look to Southeast Asia for increased trade post-Brexit
Interview
Chris Humphrey
Executive Director of EU-ASEAN Business Council
With the Brexit process done, the UK is now seeking to reshape its role in the world including how it trades with countries outside of Europe.
Chris Humphrey, Executive Director of EU-ASEAN Business Council, believes Southeast Asia represents a good opportunity for UK businesses "looking at getting big growth quite easily”.
However, CEOs with ambitions for expanding in the region would be wrong to have a single 'ASEAN strategy'. "The region's economic integration has stalled, it's not going anywhere," says Chris, speaking to PwC for our 24th Annual UK CEO Survey.
"If I was a chief investment officer sitting anywhere in Western Europe I would see it as 10 separate markets. Vietnam would be right at the top of the list, simply because Vietnam is reasonably open for trade, they've got lots of deals in place.” Chris also cites Malaysia and Thailand as attractive opportunities for UK CEOs, due to market size and ease of doing business.
But in the short-term, travel bans in place during the pandemic may limit opportunities for UK businesses to expand in Asia.
"You need to be here, you can't do it remotely. You need to meet people, you need to form the relationships and the partnerships.”
"It’s very different from doing business in Europe. It might take you 10 meetings to get anywhere, whereas it will take two or three in a European country."
Economic trends in Asia
Alongside life sciences and healthcare, Chris says the digital economy and sustainability are the two main priorities in ASEAN. "That's all most people here want to talk about. I think there’s a lot of good talent and a lot of good businesses in the EU and UK that could help."
“You need to be here, you can't do it remotely. You need to meet people, you need to form the relationships and the partnerships.”
The challenge for European firms hoping to export energy-efficient technologies will be competing with lower cost options from China. "But that's a question of how you market yourselves," says Chris. "You market it as better quality and longer lasting, so the return on investment is better in the long run."
There are also cultural differences when talking about sustainability. “In the European context, sustainability is green, the environment. In the ASEAN context, they need to grow their economies, get people educated, give them decent health systems, and look after the environment at the same time.”
UK trade post-Brexit
Ultimately, the opportunities for UK business will be shaped by the nation’s future trading relationships. The government has already signed free trade agreements with Vietnam and Singapore, and Chris expects the region will remain a priority. “I think you will see the UK being a lot more active in ASEAN now. They’ll probably be a lot more visible than the EU over here,” says Chris.
This is partly driven by the EU prioritising trade with other regions, but also the UK’s need to sign more trade deals and get “a few quick wins under its belt.” He expects the government to target Malaysia and Thailand next, as they're both large markets where the UK "could probably do a trade deal quite easily if you don’t go in and start worrying about non-core trade issues, which I think the UK would be quite happy to do."
However, a regional ASEAN agreement is unlikely to materialise in the short term. “It requires a long rocky road with ASEAN to get anywhere,” says Chris. He predicts that over the next two to four years the UK may become a dialogue partner with ASEAN and begin talks on a regional free trade agreement.
“It’s simply because the UK can move faster than the EU and they don’t come with same more complex agenda and have a simpler political set up.”
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