How will the EU elections impact Southeast Asia?

The outcome of the 2024 European Parliament elections will play out in the coming weeks, with perhaps the biggest question being whether Ursula von der Leyen, the incumbent European Commission president, can secure a second term at the helm of the EU executive arm.

This will have implications for Southeast Asia, which has increasingly aligned with the EU and now considers the European bloc a "strategic partner" of its own regional alliance.

According to analysts, the substantial losses resulting from Europe's green and liberal policies may undermine European involvement in Southeast Asia's environmental initiatives, as well as impede free trade.

More than 180 million people across Europe voted in the June 6-9 elections to choose 720 new members of the European Parliament. EU officials can be reassured by the turnout, which once again was just over 50%, similar to the level seen in 2019.

The elections have already produced their share of surprises. Most notably, far-right factions made substantial gains at the expense of the centrist and liberal groups.

French President Emmanuel Macron dissolved parliament and called snap legislative elections for June 30, with a second-round vote on July 7, after his staunchly pro-EU Renaissance party suffered a wipeout loss to the far-right National Rally (RN).

Von der Leyen, the lead candidate for the center-right European People's Party (EPP), faces significant challenges despite her block actually picking up more seats.

What happens in EU parliament?

In Southeast Asia, the response to the EU elections has been decidedly muted.

"It hasn't been on the radar in Southeast Asia, nor do regional governments recognize the importance of these polls for policy toward the region," Bridget Welsh, an honorary research associate at the University of Nottingham Asia Research Institute Malaysia, told DW. "For now, they're in a wait-and-react-later mode."

But the election results do impact Southeast Asia.

One way is from the European Parliament itself, which passes laws on international trade, environmental sustainability, agriculture, and immigration.

Brussels, the seat of the European Union, must grant approval for all EU free trade agreements. Currently, negotiations are underway with Indonesia, Thailand and the Philippines — and talks with Malaysia may soon recommence.

Southeast Asian governments were likely anticipating favorable election results for the liberal, free market-oriented parties, Alfred Gerstl, an expert on Indo-Pacific international relations at the University of Vienna, told DW.

But those parties did not do well. Renew Europe, the liberal, pro-European group, lost 23 seats while the environmentally-friendly Greens–European Free Alliance (Greens-EFA) took just 53 seats, 19 fewer than in 2019.

"This is likely to complicate the relations with Southeast Asia," Gerstl noted, adding that the nationalist turn could mean the legislature takes less of an interest in foreign affairs, meaning the EU is less inclined to support development cooperation with Southeast Asia.

The EU has imposed protectionist tariffs in the past on Southeast Asian countries, such as higher duties on Cambodian and Myanmar rice imports between 2019 and 2021 to protect European farmers.

Moreover, because the greens and liberals will have a weaker voice, the European Parliament may put less emphasis on the promotion of democracy and human rights when it reconvenes on July 16 in Strasbourg, France.

"This would be favorable for the semi-democratic and authoritarian regimes in Southeast Asia," Gerstl added.

It remains to be seen whether there will be changes to the structure of the legislature, including its president, vice-president and committee chairs. One of the vice-presidents of the European Parliament, Heidi Hautala, was particularly active in Southeast Asia, for instance.

Changes in the Commission

More important is how the European Parliament votes to select a new European Commission, the EU's executive, that will lead EU policy for the next five years.

EU foreign policy chief Josep Borrell is on his way out, and a number of former government leaders of European states are vying for his job. Most are campaigning on ways to empower the European External Action Service, the EU's foreign ministry, which is considered weak and often at the mercy of the foreign policy whims of the Commission president.

According to the latest provisional results, von der Leyen's EPP won 186 seats, ten more than in 2019. Last time around, she was elected by a coalition of the EPP, center-left Socialists and Democrats (S&D) and Renew, which in that moment controlled almost 400 seats in total.

However, the S&D dropped four seats and Renew lost more than a fifth of its seats. Von der Leyen needs 361 members of the European Parliament (MEPs) to approve her for a second term.

She could decide to ally with the Green-EFA, but her EPP group has spent years deriding this faction as eco-extremists, and such a deal might require major revisions to the Green Deal, von der Leyen's signature policy.

Alternatively, the EU Comission leader could sidle up to the national-conservative ECR, but that risks losing support from the socialist S&D and Renew factions.

Politico Europe has suggested that von der Leyen might also decide to offer all of these disparate factions the chance to form a supermajority coalition and "hope everyone simply decides they'd rather deal with her than the alternatives."

The pivot to Southeast Asia

Choices made by the new EU Commission will then impact EU policy on Southeast Asia.

As Brussels moves to reinforce trading partnerships in the region, Southeast Asia is also growing increasingly reliant on EU financing for its green transition policies.

Vietnam and Indonesia have signed up to the Just Energy Transition schemes, a G7-led initiative that includes the EU and several European states. It will provide more than €20 billion ($21.5 billion) in concessional loans and investment to finance green agendas in the Southeast Asian states.

Under Ursula von der Leyen, the European Commission has pursued a robust Green Deal, which has also increased financial assistance to the Philippines for climate resilience projects. On the other hand, the EU's green policies have also made enemies in Malaysia and Indonesia over Brussels' plans to phase out palm oil imports.

If von der Leyen allies with the greens to get herself reelected, this could intensify efforts on environmental sustainability and green finance initiatives in Southeast Asia. However, the Greens-EFA are reeling from their seat losses, and von der Leyen's own party wants to curb some of the more ambitious green targets.

Should she or an alternative Commission president enter office with the backing of the ECR faction, the green policies would likely be the first casualties, leading to potential shifts in EU-Southeast Asia relations, particularly on trade and environmental cooperation.

Edited by: Keith Walker

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