Key Points:

1. Policy Fragmentation Carries Over into the Digital Governance Space

Different priorities and approaches across countries lead to fragmented data policies. ASEAN faces a mix of free data flow models, conditional protections, and strict localization rules. Fragmentation creates hurdles for seamless digital trade and integration, potentially slowing regional economic progress.

2. ASEAN’s Asian Trading Partners Lean Towards the Conditional Model

With the exception of China, key partners of ASEAN, like India or South Korea, lean towards a conditional model of data governance. Nevertheless, protection mechanisms and requirements may vary significantly between jurisdictions. This makes cooperation in bilateral and multilateral fora essential for reducing the compliance burden on firms and thus boosting cross-border data flows.

3. Intra-ASEAN Fragmentation Challenges Digital Integration

The rapidly evolving policy environment, differing requirements among countries, as well as a lack of interoperability among national regulations hinders smooth cross-border business operations within the region. This is especially true for small- and medium-sized enterprises, as they face severe cost- and knowledge- barriers to compliance, risking being left behind as economic digitalization advances.

4. Ambiguity Abounds in Regional Mechanisms

Regional tools like ASEAN’s Model Contractual Clauses and RCEP agreements aim to simplify data flows, but adoption gaps and vague provisions limit their effectiveness. Stronger alignment is needed to unlock their full potential.

5. DEFA as an Opportunity for ASEAN

The ASEAN Digital Economy Framework Agreement (DEFA) could transform the region’s digital landscape by harmonising data regulations. Hailed as the world’s first major region-wide digital economy agreement, DEFA may present an opportunity for ASEAN countries to write their own data governance rules.

By LIU, Jingting, Ulrike Sengstschmid