20-9-2024 (SINGAPORE) Singapore is taking a leading role in negotiating two pivotal agreements aimed at enhancing trade in the digital realm. These efforts are seen as crucial steps towards helping the region’s less developed economies improve their participation in regional trade, ultimately benefiting the entire ASEAN bloc.
Jose-Antonio Monteiro, coordinator of the World Trade Organisation’s (WTO) 2024 World Trade Report, highlighted Singapore’s potential to gain from a more inclusive regional economy. Speaking to The Straits Times, he emphasised that “a more prosperous region drives demand for higher-quality products, which Singapore specialises in”. Monteiro also noted that economic convergence in the region could reduce risks associated with volatility, paving the way for sustained growth and investment.
The push for digital trade agreements comes at a critical time. Despite significant economic progress over the past three decades, with average incomes in poorer economies nearly tripling, some low-income countries have been left behind. In South-east Asia, nations such as Myanmar and Laos have struggled to keep pace with their more affluent neighbours.
To address this disparity, Singapore is at the forefront of negotiations for the ASEAN Digital Economy Framework Agreement (Defa), the world’s first regional agreement of its kind. Launched in September 2023, with negotiations targeted for completion by 2025, the Defa aims to establish a coherent and harmonised set of rules for an integrated regional digital economy.
A spokesperson for Singapore’s Ministry of Trade and Industry expressed hope that the Defa would be “comprehensive and forward-looking, with high-quality commitments that will help our peoples and businesses seize emerging opportunities in the digital economy”. The agreement is expected to address policy frictions hindering cross-border digital payments and pioneer common artificial intelligence (AI) standards among ASEAN economies.
Simultaneously, Singapore is playing a key role in the Joint Statement Initiative (JSI) on e-commerce at the WTO level. In July, the JSI’s 91 members agreed on the core content and language of draft digital rules to facilitate global e-commerce growth. This achievement, described by Deborah Elms of the Hinrich Foundation as “profoundly important”, represents the first time the WTO has managed to draft digital rules.
The JSI agreement is particularly noteworthy for its inclusivity, with participants ranging from advanced economies to the least developed countries. The draft rules have gained acceptance from major players like China and the EU, as well as smaller nations such as Benin and Laos.
Singapore’s permanent representative to the WTO, Tan Hung Seng, emphasised the potential impact of these digital trade rules. Speaking at a WTO forum, Tan stated that the final set of rules must be “commercially meaningful” and “add value to digital trade”. He highlighted key aspects of the agreement, including a ban on customs duties for electronic transmissions, which is crucial for businesses to trade confidently in the digital space.
The significance of these initiatives extends beyond mere economic gains. With around 90% of ASEAN micro, small and medium-sized enterprises already using social media for business, and over a third operating online stores, improved digital trade frameworks could open up new opportunities for businesses and promote gender inclusivity in commerce.
