Southeast Asian nations sign digital economy agreement

Ministers from Southeast Asian countries signed the Digital Economy Framework Agreement in Manila, the Philippine capital, on Saturday. The deal is meant to make it easier for businesses to trade online, make international payments and move data across borders. It is the first stand-alone, legally binding agreement on the digital economy from the Association of Southeast Asian Nations (ASEAN). According to Singapore's trade ministry, it will take effect in May 2027, 180 days after signing, and will replace the bloc's 2019 agreement on electronic commerce.

Philippine President Ferdinand Marcos Jr. formally handed the signed document to ASEAN Secretary-General Kao Kim Hourn at the opening of the bloc's summit on Sunday.

What the agreement provides

The pact promotes wider acceptance of electronic invoices, shipping documents and signatures in order to cut paperwork. It also seeks to make payment systems in different countries work together, helping firms pay suppliers and receive money from customers abroad. It sets rules for transferring commercial and financial data across borders and limits requirements for companies to store that information locally.

Singapore's Deputy Prime Minister Gan Kim Yong said exceptions would remain for privacy, business confidentiality and national security. Countries will also be able to move at different speeds as they develop their digital systems. He said differences in digital readiness had made the negotiations difficult.

Funding and implementation

The Asian Development Bank announced on Saturday an initiative to raise up to $5 billion (€4.5bn) in public and private funding by 2030 to support the agreement. The money is intended for digital infrastructure, cross-border payment systems and online identity verification tools, along with cybersecurity improvements. Governments are now identifying projects on payments, digital identities and electronic trade documents that could be ready when the agreement takes effect.

The deal comes as online business grows in the region. Google, Temasek and Bain & Company forecast that transactions in Southeast Asia's main digital sectors will reach $368 billion (€333bn) this year and exceed $1 trillion (€905bn) by 2035. The study covers 10 countries and includes online shopping, travel and food delivery.

Kok Ping Soon, chief executive of the Singapore Business Federation, said in a statement issued by the trade ministry that the key measure of success would be what businesses experience on the ground.