Foreword 3

Acknowledgements 4

Abbreviations and acronyms 10

Executive Summary 12

1 Trade, digitalisation and ASEAN 16

1.1. Trade in the digital era 17

1.2. Digital trade is at the centre of ASEAN’s initiatives 18

1.3. AMS show a strong potential to draw benefits from digital trade 21

1.4. Digital trade is increasingly important for ASEAN economies 29

1.5. Findings and recommendations 40

References 44

Notes 45

2 Reforming the domestic regulatory environment affecting digital trade 46

2.1. Domestic regulatory bottlenecks constrain ASEAN’s digital trade performance 47

2.2. Creating an enabling environment for digitally ordered goods 59

2.3. ICT and related products continue to face tariff and non-tariff measures in many AMS 66

2.4. Findings and recommendations 74

Partial-equilibrium simulation of joining the WTO Information Technology Agreement and its expansion 84

References 88

Notes 91

3 Maximising the benefits of cross-border data flow regulation 96

3.1. Data flows are critical for modern day economic and social interactions 98

3.2. Cross-border data flow regulation takes various forms 99

3.3. Data localisation measures are growing and becoming more restrictive in ASEAN 105

3.4. AMS need to continue the process of reforms to promote a balanced approach to crossborder data flows 109

3.5. Findings and recommendations 110

References 112

Notes 114

4 Deepening and broadening digital trade integration from DEFA to the WTO 118

4.1. International co-operation can help facilitate digital trade 120

4.2. International commitments on digital trade issues are growing fast in ASEAN 121

4.3. DEFA: The deeper the better 122

4.4. The WTO Agreement on E-commerce: broadening digital trade integration 130

4.5. The importance of the WTO e-commerce Moratorium 133

4.6. Findings and recommendations 135

References 136

Notes 137

5 Transitioning ASEAN towards the AI era 138

5.1. ASEAN has understood the importance of AI 139

5.2. AMS are at different stages of AI adoption 140

5.3. Market openness is critical for ASEAN to harness AI’s potential 142

5.4. Findings and recommendations 151

References 153

Notes 156

Brunei Darussalam 157

Cambodia 158

Indonesia 159

Lao PDR 160

Malaysia 161

Myanmar 162

The Philippines 163

Singapore 164

Thailand 165

Viet Nam 166