KUALA LUMPUR – Asean is on course to sign a digital economy pact in 2026, which aims to boost cross-border digital trade and services.
Talks on the Asean Digital Economy Framework Agreement (Defa) reached a “substantial conclusion” at the 26th Asean Economic Community Council (AECC) held in Kuala Lumpur on Oct 24, said Singapore’s Ministry of Trade and industry (MTI) in a release.
Touted as the first major regionwide digital economy agreement in the world, talks on Defa officially began in September 2023, covering areas such as digital trade, cross-border e-commerce, cyber security, digital identity, digital payments and cross-border data flows.
Deputy Prime Minister Gan Kim Yong, who represented Singapore at the meeting, called it a “significant breakthrough” and told reporters afterwards that Asean will finalise the pact by next year and sign it.
“Digitalisation has become a key driver for economic development and growth. It is important for Asean members to find a way to harmonise our standards, our guidelines, and so that our systems are interoperable,” he said.
Mr Gan, who is also Trade and Industry Minister, noted that the countries are at different stages of digitalisation and the pact had to accommodate differences in capacity and capability.
Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz told reporters at the meeting that Asean is looking forward to concluding “the negotiation and signing the Defa” in 2026.
“Defa aims to facilitate the seamless and secure flow of goods, services, with data security at its core, underpinned by enabling regulation, infrastructure and talent,” said Datuk Seri Zafrul, who is the AECC chairman.
In
a recent
interview
with The Straits Times
, Mr Zafrul also highlighted the Asean Defa as one of the regional grouping’s most significant initiatives. He said then that the pact would hopefully result in e-commerce that is more secure, with easier payment, as well as standardised guidelines and laws. Once completed, it is expected to double the value of Asean’s digital economy from a projected US$1 trillion (S$1.3 trillion) to US$2 trillion by 2030.
Mr Gan also highlighted the upgrade of the Asean Trade in Goods Agreement (Atiga) signed on Oct 24, which facilitates the trading of goods and reduces tariffs while removing or reducing non-tariff barriers such as by simplifying customs processes.
He said this pact was important as “it’s a signal to the rest of the world that, despite the very challenging global environment, Asean has made up our mind, that we are determined to continue to strengthen our Asean integration and cooperation”.
Signed in 2009, the Atiga has removed tariffs on more than 98 percent of tariff lines – the detailed product classifications used for setting import or export duties in a tariff schedule – as of 2020.
Mr Gan said beyond strengthening Asean, the grouping is also looking to boost engagement with the rest of the world. Asean also completed the Asean-China Free Trade Area 3.0 Upgrade, which will enhance connectivity and facilitate greater trade between Asean and China.
Besides trade pacts and dialogue with countries, Asean is also exploring working with other groups, he said. For instance, Asean is looking at how to work together with the Gulf Cooperation Council, a key bloc of six Middle Eastern states, as well as the European Union.
Asean remains a key economic partner for Singapore, said MTI in a release. In 2024, Asean was Singapore’s largest trading partner, with two-way trade reaching US$220 billion, it added.
The AECC meeting precedes the 47th Asean Summit and related summits scheduled from Oct 26 to Oct 28 in Kuala Lumpur. The 10-nation grouping will welcome its 11th member when the island nation of Timor-Leste is officially admitted to Asean on Oct 26.
World leaders, including US President Donald Trump and Chinese Premier Li Qiang, are expected to attend 2025’s event. Mr Trump will arrive on Oct 26 to join the Asean leaders’ meeting, amid the imposition of US tariffs on the export-oriented region.
Asean’s trade in goods with the US reached US$476.8 billion in 2024, with exports to the US totaling US$352.3 billion and imports from the US at US$124.6 billion.
Asked about Mr Trump’s attendance at the Asean meeting, Mr Gan said his presence signals that Asean remains an important partner for Washington.
The US President’s presence at the Asean meeting “is an important signal, an important step forward”, he said.
“The most important part… is that there is a dialogue; there is engagement. I think with dialogue engagement, you can enhance mutual understanding and also remove potential misunderstanding or confusion. I think this is very important, to continue to enhance the relationship between US and the Asia-Pacific region,” Mr Gan added.
At the Asean Summit, Thailand and Cambodia are
expected to sign a pact to sustain the ceasefire
along their shared border following a deadly five-day conflict in July. Mr Trump is expected to witness the signing of the agreement, according to Malaysian Foreign Minister Mohamad Hasan.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are meeting Chinese Vice-Premier He Lifeng from Oct 24 to 27 to discuss
Beijing’s curbs on rare earth exports
. Washington is reportedly preparing to impose new trade measures if a deal is not reached.
