ASEAN members sign legally binding digital economy pact

ASEAN countries signed the Digital Economy Framework Agreement (DEFA) on November 14, creating a legally binding framework for regional digital cooperation. Singapore Deputy Prime Minister Gan Kim Yong said the pact accommodates differences in how ready member countries are to participate.

Singapore’s Ministry of Energy, Trade and Industry said the agreement is the bloc’s first standalone digital economy pact. It aims to help digital systems work together across sectors including e-commerce, payments and logistics, enabling companies of different sizes to expand within ASEAN.

Gan, who also serves as Minister for Energy, Trade and Industry (Trade), said the framework sets baseline rules governing data transfers between countries. Exceptions would address concerns involving privacy, confidential business information and national security. He said its flexible design allows cooperation to advance while leaving participation open to countries that become ready later.

For companies, Gan highlighted provisions enabling electronic documents to replace paperwork, which he said would make trade faster and less costly. He also pointed to digital payments for wholesale transactions between businesses and the possibility of developing a digital identification system spanning ASEAN.

Gan said governments hoped to explain the agreement’s uses to businesses. Addressing competition concerns among Singapore’s smaller firms, he said ASEAN companies also faced rivals beyond the region. He said helping firms build their skills and systems would be important for them to benefit from DEFA.