How the ASEAN Digital Economy Framework Agreement Will Aid International Market

ASEAN, with a combined GDP of over USD 3.6 trillion and a population of over 650 million, is a major player in the global digital economy. ASEAN DEFA seeks to establish an environment for a sustainable and inclusive digital economy with the support of ASEAN’s talent, infrastructure, regulations, and enabling laws. The DEFA recommendations were developed through an eight-month process including several rounds of private sector and public sector consultations.

The launch of negotiations on the Asean Defa took place at the 23rd Asean Economic Community (AEC) Council Meeting, held in Jakarta. Key topics such as digital trade, cross-border e-commerce, cybersecurity, digital ID and digital payments are considered along with emerging topics such as AI to ensure a future-proof DEFA. When DEFA is put into effect, it will be the world’s first regional agreement on the digital economy, with the goal of creating regulations in a number of areas, including digital trade, cross-border e-commerce, digital payments, and artificial intelligence (AI).

DEFA’s 9 Key Modules

The DEFA aims to provide a comprehensive roadmap to empower businesses and stakeholders across ASEAN through the nine key modules listed in its Framework for Negotiating ASEAN Digital Economy Framework Agreement. This follows a series of stakeholder consultation workshops and feedback sessions with the private sector, including small and medium enterprises (MSMEs) and large corporations.

The 9 modules have been divided into three major segments, namely Trade, Safety & Cybersecurity and Cross-border corporation: –

  • Digital trade
  • Cross-border e-commerce
  • Payments and e-invoicing
  • Digital ID and authentication
  • Online safety and cybersecurity
  • Cross-border data flows and data protection
  • Competition policy
  • Cooperation on emerging topics
  • Talent mobility and cooperation

Trade

On Trade, DEFA is facilitating smoother cross-border data flows, and helping international companies manage their regional operations more efficiently. This reduces barriers to data transfer, which is vital for businesses that rely on real-time data exchange, such as e-commerce, logistics, and financial services. DEFA supports the growth of e-commerce by creating a more unified digital marketplace. This opens up opportunities for international companies to tap into the growing online consumer base in ASEAN, leveraging improved logistics, payment systems, and consumer protection laws.

Safety & Cybersecurity

On Safety and Cybersecurity, DEFA provides enhanced data governance and protection measures ensure that international companies can operate with greater confidence regarding data security and privacy. This is particularly crucial for companies handling sensitive customer information and proprietary data.

Cross-Border Corporation

On Cross-border corporation, DEFA seeks to align digital regulations and standards across ASEAN countries. This harmonization reduces the complexity and costs associated with navigating different regulatory environments, making it easier for international companies to comply with local laws and standards.
Along with the above applications, DEFA is also encouraging in development of digital skills and innovation within ASEAN. For international companies, this means a more skilled workforce and a more dynamic business environment that fosters innovation and collaboration. With a focus on improving digital infrastructure, DEFA aims to enhance internet connectivity and digital services across the region. This investment creates a more conducive environment for international companies to deploy their technologies and digital services.

The ASEAN Digital Economy Framework Agreement represents a significant step towards creating a cohesive and dynamic digital economy in Southeast Asia. For international companies, this policy offers numerous advantages, including reduced regulatory complexity, enhanced data security, improved digital infrastructure, and greater market access. By leveraging these benefits, international businesses can more effectively enter and thrive in the ASEAN market. To learn more about DEFA and entry into the ASEAN market, Contact ASEAN Business partners. With the help of our team and expertise with the ASEAN region, we can help you facilitate a smooth entry into this market.

About the Author

Sumit Dutta
Founder and Chief Executive Officer | Profile

Sumit Dutta is the Founder and Chief Executive Officer of ASEAN Business Partners. Prior to this, Sumit spent 26 years working for HSBC, one of the biggest banks in the world, in countries including Indonesia, Vietnam, USA, Hongkong and India.