Southeast Asian countries are propelling themselves into becoming digital economy juggernauts. Here are three ways the U.S. government can help American businesses climb aboard for the ride. By John Goyer US Chamber of Commerce
When does 1,300 exceed one trillion? When 1,300 regulations threaten $1 trillion in economic activity.
This was the essence of a question that the U.S. Chamber of Commerce explored in a January 24 event which looked at the phenomenal growth of Southeast Asia’s e-commerce market. According to the latest in an annual series of studies commissioned by Google, Temasek, and Bain, the region’s e-commerce market, measured by gross merchandise value, will be worth $1 trillion by 2030. In 2016, the first of these studies projected that the region’s e-commerce market would be worth $200 billion by 2025. It reached that level last year.
E-commerce, and the digital transformation of the economy writ large, have supported and undergirded Southeast Asia’s impressive economic growth in recent years. The digital revolution has helped offset gale-force headwinds from the pandemic, the war in Ukraine, inflation, and supply chain imbroglios.
This makes the 1,300 new regulations across the APEC region since 2020, according to Digital Policy Alert, all the more concerning as they threaten this economic growth. Whether addressing data flows, localization, privacy, cybersecurity, or digital taxation, this large and growing number of regulations – often developed with little stakeholder consultation or regard for international best practices – is creating a fragmented digital environment. The overall effect is to threaten economic growth across the region and limit U.S. exporters’ access to these important markets.
So, what can the U.S. and other governments do to arrest the slide toward regulatory fragmentation while supporting the $1 trillion potential? Three things, in the near term at any rate.