New ASEAN Digital Economy Agreement to Enhance Trade Efficiency
The ASEAN Digital Economy Framework Agreement aims to streamline trade and business for member countries.
MANILA — A new agreement among ASEAN nations, known as the Digital Economy Framework Agreement (DEFA), is set to transform how trade is conducted, making it faster and more efficient for businesses across the region, according to Deputy Prime Minister Gan Kim Yong.
Streamlining Trade and Business
Speaking during the 28th ASEAN Economic Community Council Meeting, DPM Gan highlighted that the DEFA offers a structured approach for ASEAN states to create interoperable digital systems, aiming to enhance the overall digital economy.
This initiative will encompass various elements, including digital payment solutions, business digital identities, and electronic trade documentation. These improvements are designed to minimize paperwork, expedite transactions, and elevate connectivity among member countries.
A Milestone for Digital Integration
As the first legally binding agreement focused solely on the digital economy within the ASEAN framework, DEFA signifies a significant milestone in the region's journey towards digital integration. It sets a foundation of common rules and frameworks that will facilitate safer and more straightforward digital business transactions across ASEAN.
DPM Gan emphasized the critical roles of collaboration in fields such as artificial intelligence and cybersecurity under this agreement. Addressing these concerns requires a coordinated effort from all member states to advance effectively.
"Negotiating this agreement took several years, and many would agree it was quite complex," said DPM Gan, noting the varying levels of digital readiness among ASEAN countries.
He expressed hope that the agreement can be implemented as early as 2027, allowing for initiatives to roll out that will directly support both businesses and consumers.
Engaging Small and Medium-Sized Enterprises
DPM Gan stressed the importance of engaging the private sector, particularly small and medium-sized enterprises (SMEs), to ensure they maximize the benefits of the agreement.
"While governments can negotiate agreements, ultimately it is businesses that need to execute these plans effectively," he said.
Broader Economic Initiatives in ASEAN
In addition to the DEFA, ASEAN is making strides on other economic fronts. The upgraded ASEAN Trade in Goods Agreement is on pace to be enacted by the end of 2026—advancing ahead of its 2027 timetable, according to DPM Gan.
The ministers also discussed ongoing developments related to a potential ASEAN Green Economy Framework Agreement, with the initial feasibility study underway and discussions anticipated to kick off in 2027.
Furthermore, progress continues on the ASEAN-Canada Free Trade Agreement (FTA), which is moving toward a substantial conclusion. DPM Gan mentioned that this could be unveiled by ASEAN leaders in the near future.
Additionally, ASEAN is reviewing and upgrading existing FTAs with South Korea and India, while exploring the possibilities of a new FTA with the Gulf Cooperation Council.
DPM Gan highlighted that the DEFA signing marks a critical advancement in ASEAN's overarching goal to strengthen regional economic integration and enhance external partnerships.
"ASEAN is taking significant steps to solidify our economic ties and develop our external relationships," he stated. "The DEFA agreement is a landmark achievement that positions ASEAN as a leader in the digital economy, bolstered by enhanced regional connectivity and sustainability initiatives."