ASEAN member states come to agreement on DEFA

The ASEAN Digital Economy Framework Agreement (DEFA) has been officially drafted, after senior economic officials convened in Manila, the Philippines, from May 27 to 29.

Southeast Asian member states would sign DEFA in November this year, alongside the 28th ASEAN Economic Community (AEC) Council Meeting and the 49th ASEAN Summit.

The final agreement emerged from a ministerial push at the 27th AEC Council Meeting in Cebu on May 7, where ASEAN ministers directed officials to resolve all outstanding issues.

DEFA was framed as ASEAN’s strategic response to a fast-evolving economy, and a commitment to building an open, seamlessly connected and rules-based digital future.

Senior economic officials stated that the May meeting was a turning point, saying all outstanding issues have been resolved, and that ASEAN is on track toward a digitally integrated and inclusive regional economy.

The DEFA draft was supposed to have been finalised in April, but required further negotiations to iron out differences among the member states.

AEC’s Deputy Secretary-General, Satvinder Singh, speaking at GovInsider’s Festival of Innovation (FOI) 2026, as well as a report by the Lee Kuan Yew School of Public Policy have noted that DEFA was key to moving the region from ad hoc initiatives to a unified, rules-based digital market.  

DEFA could usher in US$2 trillion regional digital economy

ASEAN Secretariat’s internal calculation estimated that DEFA’s implementation would accelerate the region’s digital economy growth to US$2 trillion (S$2.56 trillion) by 2030. 

This would strengthen ASEAN’s position as a global digital hub, and open doors for investment, jobs and entrepreneurship across the region.

During his speech at FOI, Singh pointed to harmonised standards and rules for digital trade, e-commerce, and data to cut costs and reduce fragmentation across the region.

The streamlining of digital regulations through DEFA would make the ASEAN region more attractive for foreign and domestic investment in digital technologies, he added. 

Part of regional digital architecture

The DEFA forms part of the regional grouping’s rapidly evolving digital architecture that would shape the future of trade, investment, and innovation in the region, said an ASEAN Secretariat statement.

More than a digital trade agreement, DEFA sought to make it easier, safer, and more seamless for business and consumers to participate in the digital economy across the region, the Senior Economic Officials Meeting (SEOM) added.

By eliminating fragmented, conflicting national regulations, DEFA would reduce heavy compliance costs that have historically stifled micro, small, and medium enterprises (MSMEs), allowing them to participate in the digital market more freely.

At FOI, Singh pointed to ASEAN’s scale as a stabilising force in turbulent times, as a bloc with 11 member countries, a population of roughly 700 million, and already the “world’s fifth-largest economy, expecting to become the fourth-largest by 2030”. 

Despite trade tensions, higher tariffs, and a challenging investment climate, the ASEAN 6  (the major economies of the grouping) recorded stronger‑than‑expected GDP growth of around 4.9 per cent and trade expansion of over eight per cent, outpacing global trends. 

Advancing ASEAN 2045 goals

ASEAN ministers stressed that DEFA’s full benefits hinged on its timely signing, effective implementation, and sustained cooperation among member states and stakeholders, framing DEFA’s central role in advancing ASEAN 2045 goals.

Singh said “part of the outcomes of DEFA” would include a consolidated ASEAN stance on issues like the debate over the moratorium on customs duties on electronic transmissions. 

He said this would give the region a clearer and more powerful collective voice in global digital trade governance.  

“DEFA is both a regional integration mechanism and a geostrategic tool,” Singh added at FOI 26. 

The agreement fits into ASEAN’s broader strategy for managing an “era of permanent disruption,” he said. 

“Faced with overlapping economic, geopolitical and technological shocks, the region is moving away from crisis-by-crisis management towards long-term structural planning,” Singh noted.