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 agreed to a framework aimed at streamlining online trade, facilitating payments, and simplifying data transfers across borders. The Digital Economy Framework Agreement, signed in Manila, marks the Association of Southeast Asian Nations' (ASEAN) first legally binding stand-alone agreement on the digital economy. It is set to take effect in May 2027, replacing ASEAN's 2019 electronic commerce agreement, according to Singapore's trade ministry.
Philippine President Ferdinand Marcos Jr. formally presented the signed agreement to ASEAN Secretary-General Kao Kim Hourn during the bloc's summit. The pact seeks to encourage broader acceptance of electronic invoices, shipping documents, and signatures, aiming to reduce paperwork. Additionally, it aims to harmonize payment systems across countries, enabling businesses to pay suppliers and receive money from customers abroad more effectively.
The agreement establishes rules for transferring commercial and financial data across borders, limiting the need for companies to store such information locally. Singapore's Deputy Prime Minister Gan Kim Yong noted that exceptions would be made to address privacy, business confidentiality, and national security concerns. Countries will also be able to progress at different paces as they develop their digital systems, Gan stated after the signing.
The Asian Development Bank announced an initiative to raise up to $5 billion (€4.5bn) in public and private funding by 2030 to support the agreement. This funding will help develop digital infrastructure, borderless payment systems, online identity verification tools, and enhance cybersecurity measures.
Differences in countries' digital readiness made negotiations challenging. Governments are now identifying projects involving payments, digital identities, and electronic trade documents that could be operational by the agreement's implementation date in May 2027. The deal comes as online business expansion across the region continues.
According to a study by Google, Temasek, and Bain & Company, transactions across Southeast Asia's main digital sectors are projected to reach $368 billion (€333bn) this year and surpass $1 trillion (€905bn) by 2035.
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