Welcome to the 81st issue of the CEEasia Briefing.
In this issue, we dissect the following topics:
- The EU and the Philippines reach a free trade agreement
- Visegrad Four and India hold first Foreign Ministers’ Meeting
- Germany’s China policy under the spotlight amid the electoral success of the far right
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1. The EU and the Philippines reach a free trade agreement
What’s going on? On September 22nd, the European Union (EU) and the Philippines reached an agreement in their Free Trade Agreement (FTA) negotiations, marking a major step toward deepening trade and investment ties. The agreement is not yet the final version of the FTA. Negotiators need to finalize technical and legal details before the text is formally signed and ratified.
Going deeper… The EU’s commissioner for trade and economic security, Maroš Šefčovič, and the Philippines’ secretary of trade and industry, Maria Cristina Aldeguer-Roque, announced the agreement. The FTA negotiations began in 2015, but stalled in 2017 amid EU concerns over human rights violations during then-President Rodrigo Duterte’s war on drugs. In July 2023, the EU and the Philippines announced a stocktaking exercise to assess whether conditions were right to resume talks. Following this, negotiations formally restarted in 2024. The recent breakthrough also follows the EU-Philippines Enhanced Partnership signed in July 2025, which expanded cooperation beyond trade.
This means… The forthcoming deal will remove more than 94% of tariff lines, covering over 97% of goods traded between the two sides. European exports would gain greater access to the Philippine market for machinery, appliances, medicines, medical equipment and transport equipment, as well as agricultural products such as pork, poultry, dairy and spirits.
The FTA will also establish rules on government procurement, opening parts of the Philippine public-procurement market to foreign bidders, while strengthening intellectual-property protection, facilitating digital trade, and introducing commitments on sustainability, energy, and raw materials.
The FTA will create new opportunities for micro, small, and medium-sized enterprises, farmers and manufacturers, while helping both sides diversify their supply chains and strengthen economic resilience. The Philippines currently benefits from duty-free access in the EU under the GSP+, a special incentive for sustainable development that supports vulnerable developing countries. This means that Philippine products can enter the EU market without paying the standard tariff on more than 6,000 product lines. The scheme expires in 2027, so any delay would leave a gap in preferential access.
Moreover… The new trade deal is part of the EU’s broader strategy in Southeast Asia. After region-to-region talks with the Association of Southeast Asian Nations (ASEAN) ended in 2009, Brussels shifted its focus to bilateral agreements to strengthen ties with ASEAN.
2. Visegrad Four and India hold first Foreign Ministers’ Meeting
What’s going on? India’s External Affairs Minister S. Jaishankar met with the foreign ministers of the Visegrad Four countries in late September to discuss boosting trade and cooperation in defense, energy, technology and innovation. The first V4-India foreign ministers’ meeting, held on the sidelines of the 81st session of the UN General Assembly in New York, marks a historic moment in V4-India relations.
Going deeper… The meeting focused on trade, investment, and cooperation among India, Czechia, Hungary, Poland, and Slovakia in innovation, defense, academia, and regional security. The meeting, held under the Slovak Presidency of the V4, is regarded as a milestone in engagement between India and the V4 countries at the Foreign Ministers’ level. According to Minister Blanar, Slovak diplomacy had worked to convene a V4-India Foreign Ministers’ meeting for the past 11 years, and he described its establishment as a breakthrough in mutual relations and a major success of Slovak diplomacy. The meeting is an important step forward, but its significance will ultimately depend on whether the plans outlined translate into sustained engagement and tangible outcomes. The ministers agreed on annual ministerial meetings and an annual, alternating business forum to provide matchmaking opportunities for companies interested in economic cooperation. This economic dimension aims to underscore the deepening of EU-India economic ties. A key step in this regard will be finalizing the EU-India Free Trade Agreement, which is planned by the end of this year.
This means… The institutionalization of this mini-lateral relationship is significant, as the V4+India format has remained underdeveloped so far. While bilateralism continues to dominate economic ties, the V4+India dialogue could provide a platform for greater political coordination, building on the existing V4+Japan and V4+South Korea formats. Furthermore, it also complements India’s existing Nordic+India platform and the broader EU-India partnership.
As pointed out in CEIAS’ recent report on India-V4 relations, India–V4 relations have long been at a point where political will consistently failed to translate into a more structured framework for cooperation. Institutionalizing the V4-India Dialogue is an opportunity to address this, but it will not be sufficient on its own.
Moreover… India–V4 ties offer more than economic opportunities. Although political momentum for greater engagement between the V4 and India is growing, public sentiment in the V4 countries has not yet fully caught up, potentially constraining the further development of the relationship. India investing more in public diplomacy and communication could help strengthen public awareness and support for closer ties in the future.
3. Germany’s China policy under the spotlight amid the electoral success of the far right
What’s going on? On September 6, Germany’s far-right Alternative for Germany (AfD) won 43.8% of the vote in Saxony-Anhalt’s state election, more than doubling its 2021 result of 20.8%. At the same time, the Christian Democratic Union (CDU), the party of Chancellor Friedrich Merz, which had been part of the state’s governing coalition since 2002, plunged to 17.2%, its lowest result in the state’s post-war history. The CDU also posted further disappointing results on September 20, when state elections were held in Berlin and Mecklenburg-Vorpommern. In Berlin, the far-left Die Linke came first with 25.7% of the vote, while in Mecklenburg-Vorpommern AfD won 38.2%. The CDU, meanwhile, failed to clear the 5% threshold for parliamentary representation there. These results reflect growing dissatisfaction with the federal government and its economic agenda, while also raising questions about the future direction of Germany’s China policy.
Going deeper… Under Merz, the CDU has taken an increasingly critical approach towards China. Yet, grievances that seem to have contributed to the AfD’s rising support, such as high energy costs, corporate restructuring and job losses in the country’s industrial heartlands, are closely connected to the economic challenges posed by China’s industrial overcapacity. Competition from Chinese companies is directly affecting German firms in sectors such as automotive manufacturing, machinery, and chemicals. Germany’s trade deficit with China continues to widen, while Germany’s exports to China fell more than 12% year-on-year to just under €37 billion in the first half of 2026. These trends suggest that, regardless of who is in power, the structural imbalances in Germany-China economic relations will not disappear. Saxony-Anhalt faces these pressures directly, with its chemical industry already strained by high energy costs and weak demand.
This means… the AfD has so far generally favored strengthening Germany’s existing economic ties with Beijing. As its support grows, its position could further shape the public debate and pressure Merz to moderate his rhetoric.
Similar dynamics could also play out at the EU level… with the growing popularity of far-right parties potentially complicating the bloc’s collective approach towards China. Political divisions across the spectrum remain on issues such as industrial policy, trade, and dependence on Chinese supply chains. France’s 2027 presidential election will be particularly important to watch, especially following the National Rally’s gains in the French Senate elections. A more fragmented European political landscape could also create greater uncertainty for Chinese companies operating in the single market.
This means… While the AfD’s rise could soften Merz’s rhetoric towards China, it is unlikely to reverse the broader direction of Germany’s foreign economic policy. In response to growing concerns over industrial competitiveness and economic dependence on China, Berlin is preparing an extended economic-security package, with Cabinet approval expected on October 14. At the EU level, Merz and French President Emmanuel Macron are also increasingly coordinating their efforts to strengthen and expand the bloc’s trade-defense and economic-security toolkit. The upcoming European Council meeting on October 15-16 will be worth following for any further announcements on the EU’s approach towards China.
Quick takes on CEEasia developments
JAPAN | Nippon Steel is investing €900 million to modernize the U.S. Steel Košice facility in Slovakia, transforming it into its primary European green steel hub. Effective 1 October 2026, the site will be renamed Nippon Steel Slovakia s.r.o. and fully integrated into the Japanese parent company’s direct ownership. Backed by €350 million in EU climate subsidies, the transition to electric arc furnace technology by 2030 underscores a strategic shift toward regional decarbonization and compliance with EU environmental regulations.
VIETNAM | The third meeting of the Vietnam-Slovakia intergovernmental committee on economic cooperation took place in Bratislava in mid-September, focusing on trade, industry, defense, agriculture, environmental issues and foreign affairs. The Vietnamese side hopes to serve as a bridge for Slovak businesses to access the ASEAN market and regards Slovakia as an entry point for expanding their businesses in Europe. Both sides also agreed to continue finalizing the Action Plan for the Strategic Partnership.
CHINA | CATL launched trial production at its battery cell plant in Debrecen, Hungary, at the end of September. The trial run focuses on assembling, optimizing, and validating production equipment and manufacturing processes in preparation for subsequent commercial mass production. CATL also started battery module assembly in the autumn of 2024, producing approximately 537,000 battery modules to date.
SOUTH KOREA | The Czech-Korean Advanced Robotics Center (KCARC) has officially opened at CIIRC CTU in Prague, establishing Central Europe’s first permanent hub for bilateral robotics innovation. A joint initiative between Czech and South Korean research institutes, the center focuses on commercializing cutting-edge advancements in artificial intelligence, robotic perception, and advanced manufacturing.
VIETNAM | The eighth meeting of the Vietnam-Czech intergovernmental committee on economic cooperation took place in Prague in mid-September and focused on economic, trade, and investment cooperation. The two have also recently agreed to begin direct flights in October 2026.
CHINA | The Czech government canceled defense minister Jaromír Zůna’s planned mid-September participation in the Xiangshan security forum in Beijing, citing his failure to properly announce the trip and his recent absence from budget negotiations. Opposition members criticized the planned travel not only for disrupting budget negotiations but also for sending a negative signal to Western allies about Czechia’s position on common security issues, mainly because the forum’s linked to the Chinese Communist Party, analysts said.
TAIWAN | Taiwan’s TCC Group Holdings (formerly Taiwan Cement Corporation), through its Dutch subsidiary, announced plans to acquire a 100% stake in Ukrainian cement company Ivano-Frankivskcement (IFCEM) and three other IFCEM subsidiaries for up to €750 million. By pursuing the acquisition, the company is hoping to extend its European cement operations from South and West Europe into East Europe and position itself to participate in Ukraine’s reconstruction once the war is over.
SOUTH KOREA | During his business trip to attend the Seoul Defense Dialogue in September, Czechia’s defense minister Jaromír Zůna met with South Korean defense industry representatives and defense minister Ahn Gyu-back to discuss the expansion of bilateral cooperation into the defense sector, building on existing engagement of Czech companies such as Tatra and Colt CZ Group in South Korea.
