The Association of Southeast Asian Nations (Asean) Digital Economy Framework Agreement is a bold step towards unlocking up to $2 trillion in economic growth for Southeast Asia.
The regional agreement is designed to accelerate the digital transformation of Southeast Asian nations by harmonising digital policies, reducing barriers to digital trade and fostering a secure, inclusive and open digital environment.
The biggest implementation trap to avoid? High-level policies that miss the mark when it comes to the everyday realities of the businesses they intend to enable.
Micro-, small- and medium-sized enterprises (MSMEs) are the backbone of Asean’s economy. However, they are also struggling the most to navigate the complexities of doing business, even with their immediate neighbours.
We asked some of Teleport’s 3,000+ small business owners scaling their eCommerce ventures for a clear picture of the gaps between policy ambitions and on-the-ground realities.
The key takeaway? If we’re serious about building a truly inclusive digital economy, we need to focus on what matters most to Asean’s 71 million MSMEs: simplicity, speed, affordability and practical support.
“MSMEs fundamentally need a common, accessible, cohesive and actionable knowledge base, beyond regulations and tariffs.”
The stories they shared illustrate on-the-ground challenges that high-level policies sometimes overlook.
For example, a small business owner selling women’s jewellery spent months attempting to enter a new market, despite Asean’s promise of a single market with 700 million consumers.
The information he needed to do so was buried under layers of gate-kept advice and lead-generation articles that were useless without a big budget to outsource to someone with the expertise to assist him.
Another entrepreneur, selling beauty products, faced delays of four to seven months to register products in Thailand and Indonesia. These challenges underscore a clear need for a harmonised, streamlined process that allows businesses to “register once, sell region-wide.”
Financial hurdles present another formidable barrier. Inconsistent import taxes and hidden cross-border costs are eroding MSME margins, making intra-Asean trade less attractive than importing from outside the region. That’s not just bad for businesses; it’s also bad for consumers.
One business owner informed us that the cost difference could result in a 20-30% markup on retail prices. Simplified import tax treatments for small Asean traders, aligned with the framework agreement’s goals of reducing regulatory divergence, could be a game-changer, making regional trade more viable and affordable.
What’s interesting is that Asean has already implemented initiatives in the past to address this issue in various ways.
For example, the Asean-wide self-certification has been implemented since 2020, which allows approved Asean exporters to declare their goods’ origin themselves to qualify for certain tariff preferences and effectively addressed “register once, sell region-wide.”
The Asean Trade in Goods Agreement has been in effect since 1992, with periodic updates. It was declared virtually tariff-free in 2020, when Asean eliminated tariffs on 98.6% of products under the agreement, except for certain goods. This is a curious gap between two realities.
As mentioned earlier, to truly unlock an inclusive digital economy, MSMEs require simplicity, speed, affordability and practical support that they can easily access, comply with and benefit from immediately.
Based on these few examples, MSMEs fundamentally need a common, accessible, cohesive and actionable knowledge base, beyond regulations and tariffs.
Currently, there’s no unified resource available for small businesses in Asean to learn how to comply with cross-border e-commerce requirements quickly.
What MSMEs need today is equitable access to the right information at the right time and right place. What is already in the Asean Access – an online portal providing information, matchmaking and training to help MSMEs and other businesses engage in Asean trade and market entry – is a good starting point.
There is an opportunity here to ground this further, making it a one-stop online portal that consolidates clear, practical “how-to” guides, framed from the business owner’s perspective rather than the policy owner’s.
This would be a quick implementation win and directly supports the spirit of “inclusive growth” that underpins the Digital Economy Framework Agreement. A simple idea that makes a big difference.
Cross-border e-commerce, one of the nine core provisions under the agreement, calls for fair treatment of digital goods and services, as well as facilitation for cross-border small shipments.
One of the sub-provisions aims to simplify customs procedures by incorporating pre-arrival processing and risk assessment of cross-border e-commerce shipments, as well as procedures for the immediate release of low-risk shipments upon arrival or departure.
We strongly support this and had the opportunity to table it at the high-level meeting of the 34th Asean Directors-General of Customs – held annually to discuss and strengthen regional cooperation and coordinate customs-related policies and initiatives – in Brunei in June, with the Asean Business Advisory Council.
We raised three key asks to foster a regional-first mindset, driving effective policy and boosting cross-border MSMEs and e-commerce movement in Asean.
First, a uniform express eCommerce clearance lane is created across Asean to fast-track cross-border e-commerce movement, supporting the aforementioned sub-provision.
Second, a simplified process is needed to facilitate the movement of restricted goods across Asean – a more accessible way to meet compliance requirements.
Lastly, a simplified and more accessible registration and maintenance requirements for “authorised economic operators” – trusted traders certified by customs authorities for demonstrating secure, compliant and reliable operations.
We made the case that these two are currently prohibitive and restrictive for MSMEs to apply to and comply with.
“True facilitation does not end with creating the rules of the road. Success in the long run desperately needs a supportive ecosystem that empowers MSMEs to thrive.”
At the recent World Economic Forum Business Dialogue on ASEAN’s Digital Economy, held on the sidelines of the 57th Asean Economic Ministers’ Meeting and Related Meetings in Kuala Lumpur, Malaysia, my fellow esteemed panel members and I had an insightful discussion on driving regional integration through the digital economy to better connect Asean.
Two big opportunities for change stood out for me: improving and simplifying cross-border trade across Asean, with MSMEs in mind, to ensure the benefits are attainable for them.
Harmonisation of standards and systems with the right technology and people is crucial, prioritising system interoperability between governments and businesses, to get us closer to the change we want, quicker.
True facilitation does not end with creating the rules of the road. Success in the long run desperately needs a supportive ecosystem that empowers MSMEs to thrive.
Because at the end of the day, the future of Asean’s digital economy isn’t just about this major milestone.
Let’s make sure our 71 million MSME constituents are winning—the dreamers, the doers, the risk-takers who are building that future from the ground up.
The work continues.
Pete Chareonwongsak is CEO of Teleport, Southeast Asia’s leading logistics provider.
