ASEAN e-commerce agreement expected to help MSMEs

At the signing ceremony of the ASEAN Agreement on Electronic Commerce, Chan Chun Sing, Singapore's Minister for Trade and Industry, noted that ASEAN is the world’s fastest growing Internet market, with 330 million Internet users* but that e-commerce adoption in ASEAN is still in its infancy compared to China and the US**. 

"Non-tariff barriers such as logistics and cross-border digital regulations continue to be challenges for micro, small and medium sized enterprises (MSMEs) looking to capitalise on e-commerce opportunities," he said.

The ASEAN Agreement on E-Commerce is ASEAN’s first agreement to facilitate cross-border e-commerce transactions. "This is testament to ASEAN’s commitment to create a conducive environment for the growth of e-commerce through advancing trade rules in e-commerce and building up greater digital connectivity within the region," Chan said. 

Discussions on the ASEAN Agreement on E-Commerce began in June 2017. The agreement aims to: 

- Facilitate cross-border e-commerce transactions. 

- Create an environment of trust and confidence in the use of e-commerce. 

- Deepen cooperation among ASEAN member states to further develop and intensify the use of e-commerce to drive regional economic growth. 

"It encourages ASEAN member states to promote paperless trading between businesses and governments to generate more rapid and efficient transactions in ASEAN. Businesses can access and move data across borders more easily, subject to appropriate security safeguards. ASEAN has also taken active steps to promote better consumer and personal data protection through the use of online dispute resolution mechanisms to facilitate the resolution of e-commerce claims," Chan said. 

By 2025, ASEAN’s Internet economy is set to quadruple to US$200 billion from the current US$50 billion in 2017, with e-commerce expected to grow to US$88 billion***. Economic growth and a young and digitally-savvy population are major drivers of this trend, bolstered by increased ICT infrastructure investments by both governments and businesses. 

*ASEAN’s Internet user base grew approximately 13% annually from 2015 to 2017. Source: e-Conomy SEA Spotlight 2017 - Unprecedented growth for Southeast Asia’s $50B internet economy. 

**E-commerce adoption in ASEAN represents only 2% of total retail sales in 2017 compared with 20% in China or 12% in the US.

***Source: e-Conomy 2025 Southeast Asia.