Southeast Asian nations sign digital trade deal to ease payments and cut paperwork
Online shopping and digital services are growing across Southeast Asia, but businesses still face different rules in each country. ASEAN’s new agreement aims to make it easier to sell, receive payments and share data across the region.
Southeast Asian countries have reached a landmark agreement on Saturday to streamline digital trade, making transactions across borders easier and reducing paperwork. The Digital Economy Framework Agreement, signed in Manila by ASEAN ministers, will officially come into force in May 2027, 180 days after the signing, replacing the association's existing electronic commerce deal from 2019.
The pact, which Singapore's trade ministry termed "the bloc’s first stand-alone, legally binding agreement on the digital economy," aims to promote the broader acceptance of electronic invoices, shipping documents, and signatures, thereby reducing bureaucratic hurdles. It also seeks to harmonize payment systems, enabling businesses to pay overseas suppliers and receive payments from international customers with greater ease.
The agreement lays down rules for the transfer of commercial and financial data across borders, allowing companies to store such information locally to a lesser extent. Singapore's Deputy Prime Minister Gan Kim Yong noted that exceptions would be made to address privacy, business confidentiality, and national security concerns. He also mentioned that countries would be able to implement the agreement at different speeds as they develop their digital systems.
To support the implementation of the agreement, the Asian Development Bank has pledged up to $5 billion (€4.5bn) in public and private funding by 2030. The funds will be earmarked for developing digital infrastructure, cross-border payment systems, online identity verification tools, and cybersecurity measures.
Negotiations for the agreement proved challenging due to the varying levels of digital readiness among the countries. Governments are now identifying projects involving payments, digital identities, and electronic trade documents that could be operational when the deal takes effect. According to a report by Google, Temasek, and Bain & Company, online business in Southeast Asia is rapidly expanding, with transactions in the region's main digital sectors projected to reach $368 billion (€333bn) this year and surpass $1 trillion (€905bn) by 2035.
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