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Why ASEAN's Digital Economy Framework Agreement Could Make The Region The New Digital Powerhouse

AWS's director for Asean public policy discusses how the agreement, currently under negotiation, could double the size of ASEAN's digital economy by 2030.

We are encouraged by and welcome ASEAN's ambition to build an open, rules-based, and dynamic digital economy through the Digital Economy Framework Agreement (DEFA) currently being negotiated in the region. DEFA could double the size of ASEAN’s digital economy to US$2 trillion ($2.7 trillion) by 2030, emboldening business, investor, and citizen confidence in the region’s economic prowess.

Amazon Web Services (AWS) stands ready to support customers and partners in ASEAN as they embark on meeting even more ambitious digital aspirations, thanks to DEFA.

Ensuring DEFA raises the bar on digital trade

When implemented, DEFA would be the first regional digital economy agreement in the world with the aim of developing rules in areas such as digital trade, cross-border e-commerce, digital payments, and artificial intelligence, among others.

Asean has excellent precedents to draw inspiration from in developing DEFA. Singapore already leads the world in designing and promoting Digital Economy Agreements (DEAs) such as the pioneering Digital Economy Partnership Agreement signed with New Zealand and Chile, as well as numerous other bilateral DEAs with Australia, the UK, and South Korea.

To unlock the tremendous growth opportunity from the digital economy, Asean member states can consider the following policy principles for DEFA:

  • Developing high-standard digital trade rules that promote cross-border data flows and discourage data localisation;

  • Embracing international standards and best practices to accelerate adoption of emerging technologies, including the development of AI technologies;

  • Promoting non-discriminatory and risk-based approaches to cybersecurity;

  • Adopting best practices for the public procurement of digital technologies, including the use of fair procurement frameworks to enable digital transformation;

  • And maintaining non-discrimination at the core of these high-standard digital trade rules.

Another policy framework that Asean may consider for DEFA is Japan’s initiative on Data Free Flow with Trust (DFFT), which emphasizes the balance between promoting seamless cross-border data flows and establishing a foundation of digital trust to underpin such flows. The DFFT framework recognizes that while the free flow of data can drive innovation, inclusivity, economic growth, and the adoption of digital technologies, it must be complemented by measures that safeguard data protection, privacy, and security.

Uplifting the backbone of ASEAN's economy—MSMEs and startups

ASEAN is a truly unique region in that it has more than 70 million micro, small and medium enterprises (MSMEs), contributing 85% to employment, 44.8% to gross domestic product (GDP), and 18% to national exports. There is no doubt that MSMEs and startups are the backbone of the Asean economy.


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