Following the launch of the negotiations on the Asean Digital Economy Framework Agreement (DEFA) — touted to be the first major region-wide digital economy agreement in the world — businesses in the Philippines are also proposing for the signing of individual agreements with each of the Asean member countries focusing digital initiatives on agriculture and micro, small and medium enterprises (MSMEs).
At the 23rd Asean Economic Community (AEC) Council Meeting held on Sunday, ministers officially launched the negotiations for the DEFA that will provide a coherent, harmonized, collaborative, and rules-based approach ecosystem towards a competitive and inclusive digital economy in the region.
In a panel discussion at the Asean Business Investment Summit also in Jakarta last Sunday, Asean Business Advisory Council (BAC)-Philippines chair disclosed a proposal for the signing of memorandum of understanding with each Asean country to focus on sectors that will bring development, specifically agriculture and MSMEs.
“We are the big brothers … Unless we embrace the MSMEs in our value chain this is going to take a long time …,” Concepcion told the panel discussion on Asean’s Digital Powerhouse at the Nexus of Connectivity and Transformation. The session delved into the development of strategic policies — including financial technology, e-Trade, and cross-border trade facilitation.
“All of these tools are important to uplift the lives of our people. That’s why we are here: how do we solve big problems especially for those who are at the bottom of the pyramid,” he said, as he pointed out that four of the ten countries in the Asean have nearly a fifth of their populations still living in poverty.
Growth must be inclusive in order to unlock the benefits, said Concepcion, and emphasized that it must be used to enable MSMEs.
He cited the Philippines case as an example of how digital technology has helped MSMEs compete with big corporations, and gave birth to a thriving digital economy that was further hastened by the pandemic lockdowns.
“We must enable MSMEs to use digitalization to their advantage,” he said. Digital growth is seen to boost cross-border e-commerce by providing MSMEs with access to new markets, and is hoped to promote financial inclusion to underserved populations.
The AEC Council endorsed the Framework for Negotiating DEFA, which will guide the negotiations of the DEFA by exercising the objectives and principles of negotiations, examining the areas to be negotiated and sets out the negotiation process and timeline.
The launch of Asean DEFA negotiations comes after the endorsement of the Asean DEFA study at the 55th Asean Economic Ministers (AEM) meeting in Semarang, Indonesia last August 19. The study identified nine core elements, including digital trade, cross-border e-commerce, cybersecurity, digital ID, digital payments, cross-border data flows, and emerging topics that are expected to be covered in the negotiations of DEFA.
Airlangga Hartarto, Indonesia’s coordinating minister for Economic Affairs said the region will work towards the completion of the Asean DEFA negotiations in 2025.
Kao Kim Hourn, secretary-general of Asean, in his opening remarks said a robust, advanced and forward-looking DEFA is expected to add up to $2 trillion to the regional digital economy by 2030, reinforcing the region’s dynamism and competitiveness in the global economy.
The first meeting of the Asean DEFA NC is scheduled to take place by the end of 2023.
Subsequent meetings will be conducted in 2024 and 2025, with the view to conclude the ASEAN DEFA negotiations by 2025.
The Asean DEFA Negotiating Committee (NC) is chaired by Thailand and includes lead negotiators from the 10 Asean member states.
