ASEAN countries sign region's first digital economy pact, laying foundation for collaboration

The Association of Southeast Asian Nations (ASEAN) member countries signed their first digital economy agreement on November 14, 2021. Singapore Deputy Prime Minister Gan Kim Yong revealed that the pact, known as the Digital Economy Framework Agreement (DEFA), took several years to negotiate and reflects the varying levels of digital readiness among the member states.

According to Mr. Gan, achieving an agreement that is ambitious yet acceptable to all countries is a challenging task. The DEFA serves as ASEAN’s first standalone digital economy agreement and aims to foster closer digital economic integration, opening up opportunities for businesses in the region’s expanding digital market. The agreement covers cross-border data flows, end-to-end digital trade, protection of source code, cybersecurity, and artificial intelligence.

It also seeks to promote interoperability across digitally-enabled sectors, such as technology, e-commerce, payments, logistics, and supply chains. The framework allows for flexibility and accommodates the diverse concerns of each country, such as privacy laws, business confidentiality, and national security. Mr. Gan emphasized that the DEFA is designed to evolve over time, enabling the bloc to progress at a faster pace while keeping the door open for other countries to join when they are ready.