By Keith Detros, Programme Manager, Tech for Good Institute
The 26th ASEAN Economic Community (AEC) Council Meeting announced the substantial conclusion of negotiations on the ASEAN Digital Economy Framework Agreement (DEFA). The landmark agreement, touted as the first of its kind globally, is one of the flagship and priority economic deliverables under Malaysia’s ASEAN Chairmanship in 2025. It is expected that the DEFA will unlock an estimated added value of up to USD 2 trillion to the region’s digital economy by 2030. The substantial conclusion of the framework agreement marks a significant milestone for the region.
Negotiations began in September 2023, when the Framework for Negotiating the ASEAN Digital Economy was endorsed by the ASEAN Member States (AMS) and the negotiation was launched at the 23rd AEC Council Meeting. At the 10th ASEAN Economic Community Dialogue, the Tech for Good Institute (TFGI) served as a knowledge partner to the ASEAN Secretariat to gather insights on policy implications and business aspirations as DEFA negotiations kicked off.
Since then, significant progress has been made to reach this point. Fourteen rounds of constructive negotiations were held by the AMS under Thailand’s leadership, with the support of the ASEAN Secretariat. In addition, several partners, including international organisations, industry associations, and think tanks, also contributed their expertise through policy dialogues and workshops aimed at supporting the negotiations.
While significant milestones have been achieved, much work remains ahead. According to the statement on DEFA’s substantial conclusion, broad agreements have been reached on the pillars of Talent Mobility Cooperation, Cooperation on Emerging Technologies (including AI), Competition Policy, Online Safety and Cybersecurity, and Source Code. However, the statement also noted that DEFA’s full potential may only be realised upon its “full conclusion, timely signing, and effective implementation.” To put it another way – with substantial conclusion comes substantial work.
Substantial Work Ahead
- Ensuring it is Concluded
Following Malaysia’s chairmanship, attention now shifts to the Philippine ASEAN Chairmanship for 2026. The substantial conclusion has indicated that key areas have already been agreed upon. Based on the statement, key provisions draw from and build on existing ASEAN agreements, but as always, the devil is in the details.
The next goal is to sign a fully concluded agreement in Manila by 2026, and it is expected that this will be one of the priority deliverables for the Philippine Chairmanship. From now and until next year, resolution of pending issues, agreement on specific provisions, and legal scrubbing will be central tasks for the negotiating committee.
Beyond 2026, even after signing, the agreement (as with past ASEAN agreements) must still be ratified or accepted by the AMS. For example, the 2025 ASEAN Framework Agreement on Mutual Recognition Arrangements notes that it will enter into force “upon the deposit of instruments of ratification or acceptance by all signatory governments with the Secretary-General of ASEAN”, which is usually a standard for international agreements in the region. Given the diversity of domestic processes across AMS, this ratification process may take time.
A review of past agreements highlights this varying times in accepting or ratifying the agreements. Under the 2000 e-ASEAN Framework Agreement, some countries submitted their instruments of ratification or acceptance within a year, while others took up to eight years. One way to address this is if a time-bound entry-into-force provision could be included, such as what was done for the 2009 ASEAN Trade in Goods Agreement and the 2020 ASEAN Trade in Services Agreement. In the aforementioned agreements, it included a provision that the agreement will come into force within 180 days of signing. However, given Southeast Asia’s uneven digital development, readiness and the commitments expected in the DEFA, such a provision may be challenging.
- Ensuring it is Implementable
Implementation work remains post-signing and ratification. If signed in the Philippines, Singapore is expected to spearhead and implement a comprehensive implementation plan, drawing upon past ASEAN insights.
Referencing past framework agreements, continued negotiations were necessary to achieve tangible results. As noted in an article by the National University of Singapore (NUS) Centre for International Law (CIL), a primary agreement such as DEFA is complemented by secondary instruments, including protocols, annexes, or implementing guidelines. This helps operationalise and define Member States’ specific commitments in greater detail. For instance, the 1995 ASEAN Framework Agreement on Services was eventually superseded by the aforementioned 2020 ASEAN Trade in Services Agreement after ten negotiation packages spanning 1997 to 2018..
Given that DEFA covers a fast-evolving digital environment, it will likely follow a similar path, translating broad provisions into practical mechanisms that can be applied consistently across Member States. The challenge is ensuring that the agreement remains relevant all throughout the process.
- Ensuring it is Fit-for-Purpose
A consistent call throughout the DEFA process has been to ensure that the agreement remains adaptive and forward-looking. There is widespread recognition that technology evolves rapidly. As such, policy innovation should cope with technological innovation. This is where agile and adaptive policymaking becomes essential. However, in order to have responsive and fit-for-purpose policies, evidence-based and data-driven decision-making are essential.
It is therefore important that the implementation plan specify an agreement on what will be measured and how progress will be defined. Part of this exercise is understanding what are the areas of convergence and divergence especially in tech governance. TFGI releases the Evolution of Tech Governance report annually, to help take stock of key tech governance developments in the region. Understanding regional trends and country nuances would help in ensuring the implementation of specific data pillars remain fit-for-purpose.
The ASEAN Integration Monitoring Directorate (AIMD), in partnership with think tanks and other stakeholders, are well-placed to support this endeavour. AIMD has released reports tracking ASEAN’s progress towards regional integration, and thus embedding an initiative tailored to the implementation of DEFA can help in ensuring that digital economy integration is done in a structured and measurable way.
Greater Transparency to Enhance the Multi-Stakeholder Approach
With substantial work ahead, sustained efforts through a multi-stakeholder approach is needed. Past initiatives have demonstrated promising engagement through consultative policy dialogues and workshops conducted by the negotiating committee and the ASEAN Secretariat. The capacity-building workshops and policy dialogues should definitely continue throughout the finalisation, legal scrubbing, signing, ratification, and implementation phases of the framework agreement.
However, there remains strong interest in greater visibility into DEFA’s draft articles. A preview on the framework agreement can also help in making the multi-stakeholder approach more targeted. Stakeholders, including industry associations and think tanks, are keen to preview its provisions to understand potential policy implications of the policies. For partners and donor organisations, this transparency will also help in identifying areas of capability development or policy support to prioritise. Continued communication, transparency and knowledge-sharing throughout the process will contribute for DEFA to be concluded efficiently, implemented effectively, and remain fit-for-purpose in ASEAN’s evolving digital landscape.
