This chapter investigates how ASEAN countries can leverage international discussions to deepen and broaden digital trade integration and reduce digital fragmentation. The results highlight that, depending on the degree of ambition, the Digital Economy Framework Agreement (DEFA) can increase intra-ASEAN trade by between 13% and 20% (and total trade by 3‑4%). In parallel, wider participation in the WTO Agreement on E-commerce would broaden integration efforts, ensuring that ASEAN countries remain some of the most integrated globally, increasing total trade by between 0.3% (Brunei Darussalam) and 6.5% (Myanmar). The importance of reinstating the WTO e-commerce Moratorium for ASEAN countries is underscored.
Digital Trade Review of the Association of Southeast Asian Nations
Abstract
The ASEAN region is one of the most integrated in terms of digital trade commitments in trade agreements. Singapore is the global top performer, and seven other AMS (Viet Nam, Thailand, Indonesia, Lao PDR, Brunei Darussalam, Malaysia and Cambodia) are ranked in the top 20.
The gains from implementing the Digital Economy Framework Agreement (DEFA) hinge on the degree of ambition. Estimates suggest that a shallow DEFA could increase regional trade by around 13% (total trade by 2.8%), a deep DEFA by 16% (total trade by 3.3%) and an extensive DEFA by 20% (total trade by 4.2%). Across all scenarios, the largest proportional gains are projected for Cambodia, Lao PDR, Myanmar, and Viet Nam. However, these countries are also likely to face higher implementation hurdles.
The WTO Agreement on E-commerce offers an opportunity to broaden digital trade integration beyond the region. Currently, 6 AMS (Singapore, Lao PDR, Brunei Darussalam, Malaysia, Myanmar and the Philippines) have signaled their support to this plurilateral agreement. Should it come into force, participating AMS have the potential to see their trade increase by between 0.3% (Brunei Darussalam) and 6.5% (Myanmar). Viet Nam, Thailand, Indonesia and Cambodia could consider participating to benefit from the agreement’s trade enhancing effects.
Reinstating the WTO e-commerce Moratorium would help limit digital trade frictions. The WTO e-commerce Moratorium has provided a stable and duty-free environment that has enabled digital trade to thrive. However, at MC14, the Moratorium was not renewed. Evidence shows that the potential foregone revenue for AMS from the Moratorium is small. Preserving a duty-free environment would support wider gains, including reduced costs and uncertainty for growing trade in digitally deliverable services (see Chapter 1). In post MC14 discussions, reinstating the WTO Moratorium should be a key priority.
As digital trade becomes an increasingly vital component of ASEAN’s trade (see Chapter 1), understanding the potential impact of deeper and broader digital trade integration is essential. This can help policymakers identify emerging opportunities, guide international negotiations, and prioritise domestic reform efforts. This, in turn, can enable the design and implementation of policy frameworks that not only facilitate seamless cross-border digital transactions, but also generate tangible benefits for businesses, consumers, and the wider economy.
The OECD Index of Digital Trade Integration and Openness (INDIGO) is a summary measure of evolving international discussions and commitments on issues that matter for digital trade. It covers 193 countries from 2000 to 2024. The INDIGO ranges from zero, no digital trade integration and openness, to one, capturing full digital trade integration and openness with all partners and across all issues identified.
The INDIGO’s bilateral level calculation captures the breadth and depth of international discussions and can be understood as a measure of distance to full digital trade integration with all partners. The INDIGO distinguishes between two dimensions:
INDIGO-i tracks non-trade-related international instruments, including agreements on privacy, cybersecurity, and AI governance.
INDIGO-t focuses on trade-related instruments, including WTO agreements, regional trade agreements, and dedicated digital economy agreements.
The INDIGO is based on an underlying framework reflecting ongoing and concluded digital trade discussions, covering 28 specific issues under five broad policy areas:
Enabling e-commerce: Including issues related to electronic transaction frameworks, electronic authentication and electronic signatures, electronic contracts, electronic invoicing, electronic payments, digitalising border processes and paperless trading.
Openness and e-commerce: Including customs duties on electronic transmissions, as well as access to the internet, telecommunications, ICT goods and open government data.
Trust and e-commerce: Including online consumer protection, unsolicited commercial electronic messages, personal data protection, source code, cryptography, and cybersecurity.
Cross-border data flows and data localisation: Including location of computing facilities.
Wider digital economy issues: Including competition in the digital economy, digital inclusion, digital identities, artificial intelligence, taxation and FinTech.
By offering a structured and evolving view of digital trade integration, the INDIGO serves as a critical tool for policymakers, helping identify where progress is being made, where gaps remain, and how countries can work together to create a more open and seamless global digital economy.
Source: OECD (2025[1]).
Using the OECD Index of Digital Trade Integration and Openness (INDIGO) (see Box 4.1), this section presents an overview of existing ASEAN Member State’s (AMS) international commitments on digital trade issues. It then provides a set of counterfactual exercises illustrating the potential implications of greater ASEAN digital trade integration. The first focuses on the effects of increasing regional integration through the completion of the ASEAN Digital Economy Framework Agreement (DEFA). The second considers the broader impacts of deeper digital trade integration in the context of ongoing discussions under the WTO E-commerce Agreement. The last section discusses some of the potential implications of discussions around the WTO e-commerce Moratorium.
ASEAN’s participation in digital trade discussions is growing fast, reflecting a strategic effort by individual Member States to secure greater access to the global digital economy. Early bilateral trade agreements involving AMS rarely featured digital trade provisions, focusing instead on traditional areas like tariff liberalisation. However, with the acceleration of the digital transformation, AMS have increasingly sought to incorporate dedicated digital trade chapters or provisions into their regional trade agreements (RTAs), putting them at the forefront of digital trade discussions.
Today, 44% of ASEAN’s RTAs incorporate a digital trade chapter, that is higher than the world average (27%, see Figure 4.1). Countries such as Singapore, for instance, have been especially proactive, entering into landmark agreements like the Digital Economy Partnership Agreement (DEPA), which include modular and comprehensive rules on data flows, electronic payments, and digital identities. These efforts underscore a broader recognition of digital trade as a vital component of modern economic strategy.
Share of RTAs incorporating a digital trade chapter
Note: Analysis only considers trade agreements currently in force with a digital trade chapter referring to there being a dedicated treaty section for e-commerce/digital trade. Regional trade agreements (RTAs) are identified from the WTO RTA database and the TAPED database. Digital trade chapters are identified from the TAPED database (September 2025 version).
As a result, the ASEAN region is one of the most integrated in terms of international digital trade commitments in trade agreements. Singapore is the global top performer, but seven other AMS (Viet Nam, Thailand, Indonesia, Lao PDR, Brunei Darussalam, Malaysia and Cambodia) are ranked in the top 20, most with INDIGO scores above the OECD average (Figure 4.2).
INDIGO-t score for AMS 2024 versus 2000
Note: INDIGO-t scores capture degree distance towards full digital trade commitments across all areas identified in the INDIGO trade framework with all countries.
Source: OECD Index of Digital Trade Integration and Openness (INDIGO) (2025).
Through these agreements, ASEAN countries deepen institutional capabilities, build regulatory confidence, and form strategic alliances that help them attract digital investment and stay technologically competitive. Collectively, these bilateral engagements signal ASEAN’s growing presence in global digital trade governance, while feeding back valuable lessons into ASEAN’s ongoing negotiations for the region-wide DEFA.
The DEFA aims to create a unified and forward-looking framework to deepen digital integration across ASEAN. Building on existing digital co‑operation, including the ASEAN Digital Integration Framework and the Bandar Seri Begawan Roadmap, DEFA seeks to make digital regulations more interoperable, remove barriers to cross-border digital trade, and enable seamless data flows, e-payments, and digital services. Its ambition is to transform ASEAN into a leading digital economy by fostering an open, secure, interoperable, and inclusive digital ecosystem, thereby enhancing the region’s competitiveness, supporting innovation, and ensuring that all Member States, regardless of their level of digital maturity, benefit from digital transformation (see Box 4.2).
The Digital Economy Framework Agreement (DEFA) is considered a pivotal moment in ASEAN’s efforts to unlock the opportunities of regional digital integration. It is the final action item included in the 2021 Bandar Seri Begawan Roadmap (BSBR) (see Chapter 1.3), which called for negotiations on an agreement to establish an “open, secure, interoperable, competitive and inclusive regional digital economy,” underpinned by enabling rules, infrastructure, and talent.
Nine core elements are identified as priorities: (1) facilitating cross/border trade with electronic documents and interoperable processes; (2) creating a conducive environment for cross-border e-commerce; (3) promoting digital payments and electronic invoicing; (4) developing a mutually recognisable and interoperable digital identity and electronic authentication framework; (5) facilitating cross-border data flows and establishing frameworks for data privacy protection; (6) improving co‑operation on cybersecurity and creating an open and secure online environment; (7) creating mechanisms for co‑operation for standards and regulations in emerging topics such as AI; (8) facilitating digital talent mobility and talent building; and (9) creating a fair and transparent competitive environment (ASEAN, 2023[2]). The AEC Council decided to start negotiations in September 2023. Since then, the respective negotiating committee has convened over 14 rounds of negotiations.
On 24 October 2025, the AEC Council announced the substantial conclusion of the DEFA negotiations. According to ASEAN (2025[3]), it is based on progress in implementing the BSBR, in particular as concerns the ASEAN Single Window, digital payment, data privacy, cross-border data transfers, and ASEAN Unique Business Identification Number (UBIN). Building on existing digital trade commitments, DEFA would introduce provisions on cross-border data flows, e-payments, personal data protection, and alignment with the UNCITRAL Model Law on Electronic Transferable Records. Broad agreement has been reached in emerging areas like talent mobility, emerging technologies (e.g. AI), competition policy, online safety and cybersecurity, and source code. The full conclusion and signing of the agreement, which is foreseen to play an essential role in realising the ASEAN 2045 vision and the AEC Strategic Plan 2026‑2030, is expected by 2026.
4.3.1. Moving towards an extensive DEFA
Although DEFA negotiations have, reportedly, been substantially concluded, their outcome has not been made public (as of December 2025).1 As a result, to better understand its potential implications, assumptions need to be made about the outcome of the discussions. Using the OECD INDIGO, three different digital trade integration scenarios are explored, each based on existing agreements involving ASEAN countries. Throughout, the assumption that commitments are fully implemented is made, although there are likely to be differences in terms of capacity and cost of implementation across different AMS.
Shallow DEFA – this scenario extends existing commitments in the digital trade chapter of CPTPP to all ASEAN Members States.
Deep DEFA – this scenario extends the most ambitious agreement in the region (and globally)—the UK-Singapore Digital Economy Agreement—to all ASEAN Member States.
Extensive DEFA this scenario takes the maximum possible commitment identified in the INDIGO Framework, capturing binding commitments across all possible digital trade areas.
Note: For each Specific Area, scores reflect whether there is no commitment (0), non-binding commitment (0.5) and binding commitment (1). For the computation of the OECD INDIGO, these values are subsequently weighted. In the Specific Area category, the percentages indicate the weights applied to the scores under the INDIGO framework.
Source: The methodology can be found in OECD (2025[1]) and are, in part, based on the TAPED database.
The shallow DEFA scenario presents an agreement that is 44% of the way towards full digital trade integration and openness (capturing 12.5 points of a potential 28 or, when weights are applied, 54% of the way)) – Table 4.1. It has a strong coverage of enabling e-commerce provisions, including electronic transaction frameworks, e-signatures, e-contracts and some progress in digitalising border processes and paperless trade. It covers various aspects of openness and e-commerce except tariffs on ICT goods and open government data and many areas related to trust and e-commerce, such as privacy protection, consumer protection, SPAM, source-code and elements of cybersecurity. The shallow agreement also has strong and binding provisions on data flows and data localisation but has very little by way of discussions on wider digital economy issues, including AI, digital inclusion, digital identities and related.
The deep DEFA is 66% of the way towards full digital trade integration and openness (when weights are applied it is 70.5% of the way). It builds on the shallow DEFA scenario extending coverage in wider digital economy issues where commitments, albeit not binding and involving coordinating approaches, are made in areas such as digital identities, competition, and artificial intelligence.
In turn, the extensive DEFA scenario reflects a highly ambitious agreement, which deepens co‑operation to its maximum across all areas (100% of the way towards digital trade integration and openness). While this is unlikely to be a level of commitment that any country, in ASEAN or not, is able to achieve at present, the scenario provides a north star towards which to strive.
The different scenarios will have different impacts on the overall INDIGO scores, giving a preliminary overview of potential benefits at stake (Figure 4.3).
A shallow DEFA would increase digital trade integration and openness by 2.8%, on average, with significant variation across AMS (between 1.5% (in Singapore) and 9.5% (in Myanmar));
A deep DEFA would increase digital trade integration and openness a lot more, by 7.9% on average; whereas
An extensive DEFA would increase digital trade integration and openness by 16.3% on average. Particularly noteworthy would be the impact on Myanmar where digital trade integration and openness would increase by 29%.
Overall, and as expected, the higher the assumed degree of digital trade integration, the higher the impact on INDIGO scores. At the same time, the higher the existing degree of digital trade integration and openness the lower the overall impact, which is why the impact on Singapore is smaller than on others.
Note: Panel A identifies the overall INDIGO score as well as the contribution that the different permutations of the Digital Economy Framework Agreement (DEFA) would add to this score. By contrast, Panel B captures the percentage change to the original INDIGO as a result of the different DEFA scenarios.
Source: calculations based on OECD INDIGO and Bekkers, Lopez-Gonzalez and So (2025[4]).
4.3.2. DEFA has the potential to increase ASEAN regional trade by 13‑20%
The overall trade impact of the different DEFA scenarios will depend on the structure of bilateral trade, whether more geared towards manufactured goods, agricultural produce or digitally deliverable services.2 They will also depend on the importance of ASEAN partners in overall trade. The higher the bilateral trade with ASEAN partners, especially in sectors most affected by changes in INDIGO scores, and the higher the overall change in the INDIGO score, the higher the trade impacts (Box 4.3).
In order to assess the potential trade effects of digital trade integration, a structured three-step procedure is used (see Bekkers, Lopez-Gonzalez and So (2025[4])). This involves:
Estimating changes in INDIGO scores – The first step measures how the Digital Economy Framework Agreement (DEFA) would alter countries’ INDIGO scores, capturing the degree of overall digital trade integration and openness at the bilateral level.
Calculating INDIGO elasticities – In the second step, the relationship between changes in INDIGO scores and trade flows is quantified using a structural gravity model (Bekkers, Lopez-Gonzalez and So, 2025[4]). This produces the INDIGO elasticity, which indicates the percentage change in trade associated with a one-point change in the INDIGO score.
Approximating trade impacts – Finally, the expected changes in INDIGO scores are combined with the estimated elasticities to calculate the overall impact of the DEFA on trade. This yields a quantitative estimate of the agreement’s potential partial equilibrium trade benefit.
Through this approach, policymakers can gain a more precise and actionable understanding of different digital trade integration options and how these might reshape trade patterns in ASEAN. In turn, this can enable them to design policies that maximise the benefits of the region’s digital transformation.
However, there are three important points to note. The first is that this calculation yields the partial equilibrium effects of the agreement. This means that the analysis does not incorporate the indirect effects arising from changes in trade between different partners. As a result, these partial equilibrium effects are likely to be upper bound estimates (the indirect effects are likely to imply greater competition in particular markets attenuating the partial equilibrium effects). The second is that there are other dynamic mechanisms that might also be at play. This could include the reallocation of factors of production which could drive productivity effects that could amplify impacts. The third is about implementation, where the underlying assumption is that commitments turn into direct implementation, to the extent that they do not, the reported benefits are likely to be delayed.
On average, a shallow DEFA is set to increase intra-ASEAN trade by an average of 13% (total trade by 2.8%). In turn a deep DEFA would increase regional trade by an average of 16% (total trade by 3.3%) and an extensive DEFA by 20% (total trade by 4.2%). The deeper the degree of integration the higher the trade impacts.
However, the aggregate results hide important variation across AMS. Overall, and as a share of total trade, Brunei Darussalam and Viet Nam would see the lowest trade impacts. For Brunei Darussalam, this is because a large share of its exports, including to other ASEAN partners, are natural resources which are not statistically associated with changes in the digital trade environment.3 For Viet Nam, the smaller impact is driven by a combination of factors. The ASEAN market represents a lower share of overall exports for Viet Nam than for other ASEAN partners. At the same time exports from Viet Nam to ASEAN partners are in manufactured goods which have a lower INDIGO elasticity than digitally delivered services or agricultural produce.
Lao PDR, Myanmar and Cambodia are set to benefit most from DEFA as the agreement becomes deeper. They would see their total exports increase by 7.3%, 5.9% and 5.4% respectively as a result of an extensive DEFA agreement (regional exports would grow by 14.7%, 26.9% and 29.7% respectively). If instead the outcome of the DEFA resembles the deep DEFA scenario, the impact would still be significant, increasing Lao PDR, Myanmar’s and Cambodia’s total exports by 5.8%, 4.5% and 3.8% (as a share of regional trade this would imply a growth of 11.7%, 20.4% and 22.5% respectively). These results suggest that DEFA has a strong potential to boost the trade of the less developed ASEAN Member States most, providing important developmental benefits. That said, these higher benefits might coincide with higher implementation and compliance costs, meaning that Lao PDR, Myanmar and Cambodia will likely need to work harder on implementation to realise these. To this end, capacity-building and implementation support mechanisms to accompany reform would be helpful (see also UNESCAP-ASEAN, 2026).
Thailand, Malaysia and Indonesia are also set to benefit, albeit to a lower degree. They would see their total exports grow between 4% and 5% (11% and 20% in terms of regional trade) while Singapore and the Philippines would see trade rise by between 3% and 4% (13% and 20% in terms of reginal trade). This is partly driven by the fact that these countries already have important digital trade commitments in place, including among themselves, which implies that DEFA would increase their digital trade integration but to a lesser extent than for those that have shallower commitments.
Source: Partial equilibrium impacts based on Bekkers, Lopez-Gonzalez and So (2025[4]).
Overall, the analysis shows that significant trade benefits would arise from deepening digital trade integration among AMS. An ambitious DEFA would not only increase digital trade but also set in motion the mechanisms needed to effectively continue to adapt to the accelerating pace of the digital transformation, something that will be important as the AI revolution takes hold (see Chapter 5).
While deepening regional integration through initiatives such as the DEFA can deliver significant benefits, further gains may be realised by extending commitments to a broader set of trading partners. Engagement in existing plurilateral processes—such as the WTO Joint Statement Initiative on electronic commerce (Box 4.4)—offers a pathway to align ASEAN’s digital trade rules with global standards, enhance interoperability, and expand market access beyond the region. In this way, ASEAN economies can position themselves to capture a larger share of the opportunities emerging from the global digital economy.
The WTO’s Joint Statement Initiative (JSI) on electronic commerce was launched at the 11th Ministerial Conference (MC 11) in December 2017, when 71 Members agreed to initiate exploratory discussions on trade‑related aspects of e‑commerce. Over the following years, through multiple negotiation rounds, the initiative grew to include up to 91 WTO Members, culminating in the release of a "stabilised" draft Agreement on Electronic Commerce (AoE) in July 2024. In December 2025, 72 WTO Members supported its incorporation into Annex 4 of the WTO (WTO, 2026[5]), but consensus is still needed for the agreement to come into force. At the 14th WTO Ministerial Conference held in Yaoundé in March 2026, 66 WTO Member States covering near 70% of global trade adopted a pathway to bring into force the WTO Agreement on Electronic Commerce (WTO, 2026[6]).
4.4.1. The WTO AoE would extend digital trade integration outside the region
In the context of the INDIGO framework, the AoE has a strong coverage in areas related to enabling electronic commerce, including provisions on electronic transaction frameworks, e-authentication, e-signatures, e-contacts and e-invoicing (among others), scoring 5 out of a possible 7 points in this category. In the area of openness and e-commerce, the AoE covers most elements except for market access for ICT goods, scoring a total of 3 out of 5 points. In trust and e-commerce, the AoE touches on consumer protection, spam, personal data protection and cybersecurity, but not on source-code and cryptography (scoring 3.5 out of 6 potential points). However, the AoE does not include commitments on cross-border data flows and data localisation, nor does it cover any of the issues classified under wider digital economy issues.
Overall, the AoE scores 11.5 points of a potential 28 points, suggesting the agreement is 40% of the way towards maximum depth. It is therefore a slightly shallower agreement than the different DEFA scenarios that were investigated in the previous section. However, it covers different countries and can therefore provide new avenues for international integration (Table 4.2).
The impact of the AoE on overall digital trade integration and openness will be different across ASEAN countries (Figure 4.5). Currently, only six ASEAN countries have openly supported the incorporation of the AoE into the architecture of the WTO (Singapore, Lao PDR, Brunei Darussalam, Malaysia, Myanmar and the Philippines).4 These would see their digital trade integration and openness rise by between 30% and 70%. Importantly, for the other four AMS, Viet Nam, Thailand, Indonesia and Cambodia, the assumption is that there are no changes to policy, this implies that entry into force of the AoE would leave them behind in terms of digital trade integration and openness.
Should the AoE be extended to the entirety of the WTO Membership, the impact on digital trade integration and openness would be sizeable and range between 120% to 240% for AMS.
INDIGO score with simulated impact of different permutations of the Agreement on E-commerce
Note: AoE_71 captures the WTO Agreement on E-commerce (AoE) among the 71 economies that have openly supported its incorporation at the General Council meeting in February 2025. Recently, the Philippines also openly supported the incorporation of the AoE. AoE_166 captures the implementation of the AoE among the entire WTO membership.
Source: calculations based on OECD (2025[1]).
4.4.2. The WTO AoE has the potential to increase ASEAN trade
The AoE has the potential to increase trade of participating AMS by between 0.3% (Brunei Darussalam) and 6.5% (Myanmar) (Figure 4.6). The more widespread implementation of the AoE by the entire WTO membership would lead to bigger impacts, especially for many AMS that are not participating. Given the trade benefits associated with participation in the Agreement on E-commerce, it would be important for Viet Nam, Thailand, Indonesia and Cambodia to participate in this agreement in order to benefit from the trade enhancing effects of the AoE in non-regional markets.
Simulation of potential increase in trade (in % of a country’s total trade) under different scenarios of implementing the WTO AoE
Note: Partial equilibrium impacts calculated based on Bekkers, Lopez-Gonzalez and So (2025[4]). The results do not reflect that the Philippines openly supported the incorporation of the Agreement on E-commerce (AoE) into the WTO architecture in December 2025.
Since 1998, governments have regularly extended a moratorium on applying customs duties on electronic transmissions at the WTO (the WTO e-commerce moratorium for short). This has underpinned a stable and duty-free environment that has enabled digital trade to thrive (IMF et al., 2023[7]). However, at the WTO’s 14th Ministerial Conference in Cameroon in March 2026 the Moratorium was not renewed. This section reviews what the Moratorium is and how AMS might think about its economic implications.
4.5.1. What is WTO e-commerce Moratorium?
The WTO e-commerce moratorium is a commitment to continue the practice of not applying customs duties (i.e. tariffs) on electronic transmissions. It had been in place since 1998 and is the only existing WTO commitment that explicitly applies to e-commerce.
One important challenge in understanding its implications arises from there being no official WTO definition of what electronic transmissions refer to. This implies that there is room for interpretation about the precise scope of the commitment and therefore its potential impact.
While there is wide recognition of the positive role of the Moratorium, some WTO members have expressed concerns about the nature of the commitment and have questioned its potential fiscal implications. For example, the e-commerce Moratorium implies that a country importing a movie via an electronic transmission foregoes the tariff revenue associated with its importation via a physical carrier medium, like a DVD. As the digital transformation accelerates, more trade is likely to be dematerialised, exacerbating these concerns.
Identifying the fiscal implication of the WTO e-commerce Moratorium has been the subject of a large number of papers (Andrenelli and López González, 2019[8]; Banga, 2019[9]; Schuknecht and Pérez-Esteve, 1999[10]; Ajmone Marsan et al., 2024[11]; Teltscher, 2000[12]; Hanappi, Jakubik and and Ruta, 2023[13]; Andrenelli and Lopez-Gonzalez, 2023[14]). These broadly concur that the potential fiscal implications of the Moratorium are likely to be small, not exceeding losses of 0.1% of overall government revenues (IMF et al., 2023[7]).
This potential foregone customs revenue must also be understood in the context of rising revenue from Value Added Taxes of Goods and Services Taxes (VAT/GST) arising from growing consumption of digital services which are subject to these taxes. Indeed, recent OECD work shows that for most countries, potential foregone customs revenue arising from the WTO e-commerce Moratorium are completely offset by growing VAT/GST takings (Andrenelli and Lopez-Gonzalez, 2023[14]).
Beyond revenue, recent studies also highlight the importance of the Moratorium in enabling domestic and international competitiveness, consumer welfare and smaller actors’ integration into the global economy (Andrenelli and Lopez-Gonzalez, 2023[14]).
4.5.2. Potential revenue implications for AMS are small
These broad findings remain valid for AMS (Table 4.3). For all but Brunei Darussalam, the potential foregone revenue arising from the WTO e-commerce Moratorium is below 1% of total customs revenue. For those where data is available, this is below 0.1% of total government revenue. Moreover, all countries except Cambodia fully offset this negative impact due to rising revenue collection from VAT/GST on “born digital” trade.5
Note: N/A identifies missing data to calculate variables. * based on the assumption that countries will charge tariffs on electronic transmissions equivalent to those they charge on digitisable goods.
Source: based on disaggregate data from Andrenelli and Lopez-Gonzalez (2023[14]).
In addition, if the Moratorium were to fall and countries were to apply customs duties on electronic transmissions similar to those they apply on digitisable goods, AMS exports would fall. Cambodia would see exports fall by 1.3% followed by Malaysia by 0.7% and Viet Nam, 0.4%. This is because these AMS’ exports are towards countries that charge higher tariffs on digitisable goods (which is being used as a proxy for the potential tariffs that could be charged on electronic transmissions). This is under the assumption that countries will charge similar tariffs to digital equivalents of digitisable goods.6
4.5.3. AMS should support the reinstatement of the WTO e-commerce Moratorium
Overall, the potential foregone revenue implications from the WTO e-commerce Moratorium are small and for all but Cambodia, potential losses in customs revenue would be overturned by increased revenue from VAT/GST on born digital trade. In turn, the broader economic cost of imposing tariffs on electronic transmissions in terms of trade and economic competitiveness are likely to be large and negative, particularly for lower income countries.
Overall, for ASEAN, the WTO e-commerce Moratorium is less a fiscal constraint than a strategic enabler of digital transformation, regional integration and long-term, inclusive growth. It is therefore recommended that AMS continue supporting the Moratorium in post MC14 discussions and with this the WTO Work Programme on e-commerce which they could use to clarify issues they may have, including around scope and definition. For Cambodia, efforts to increase efficiency of VAT/GST systems would help increase revenue.
Overall, the analysis reveals that ASEAN Member States are at the forefront of digital trade discussions. If the region is to maintain its competitive edge in this area, it will be important to sign an ambitions DEFA and engage in discussions at the WTO, including the WTO Agreement on E-commerce and the WTO e-commerce Moratorium which is currently to be discussed at the General Council after not being renewed at MC14. Beyond this, it is also important to ensure that the gains from closer integration materialise, including through ensuring appropriate implementation mechanisms. This might be particularly important for AMS with lower implementation capacity. Implementation support mechanisms and capacity-building efforts would help them better accompany reforms to realise the full potential of closer integration.
References
[11] Ajmone Marsan, G. et al. (2024), Towards an ASEAN Innovation Ecosystem: Start-up Creation for Inclusive and Sustainable Economic Development.
[8] Andrenelli, A. and J. López González (2019), “Electronic transmissions and international trade - shedding new light on the moratorium debate”, OECD Trade Policy Papers, No. 233, OECD Publishing, Paris, https://doi.org/10.1787/57b50a4b-en.
[14] Andrenelli, A. and J. Lopez-Gonzalez (2023), “Understanding the potential scope, definition and impact of the WTO e-commerce Moratorium”, OECD Trade Policy Papers, No. 275, OECD Publishing, Paris,, https://doi.org/10.1787/59ceace9-en.
[3] ASEAN (2025), “ASEAN Economic Community Council Statement on The Substantial Conclusion of the ASEAN DEFA Negotiations”, https://asean.org/wp-content/uploads/2025/10/ADOPTED-AECC-Statement-on-Substantial-Conclusion-of-DEFA-Negotiations-24Oct2025.docx.pdf (accessed on 18 December 2025).
[2] ASEAN (2023), Study on the ASEAN Digital Economy Framework Agreement, https://asean.org/wp-content/uploads/2023/10/ASEAN-Digital-Economy-Framework-Agreement-Public-Summary_Final-published-version-1.pdf (accessed on 18 December 2025).
[9] Banga, R. (2019), “Growing Trade in Electronic Transmissions: Implications for the South”, UNCTAD Research Paper, No. 29, UNCTAD, Geneva.
[4] Bekkers, E., J. Lopez-Gonzalez and R. So (2025), “Great expectations: Quantifying the potential economic impact of the WTO agreement on E-Commerce”, WTO Staff Working Paper: Research ERSD-2025-06, https://www.wto.org/english/res_e/reser_e/ersd202506_e.htm.
[13] Hanappi, T., A. Jakubik and M. and Ruta (2023), “Fiscal Revenue Mobilization and Digitally Traded Products: Taxing at the Border or Behind It?”, IMF Notes No. 2023/005, https://www.imf.org/en/publications/imf-notes/issues/2023/09/07/fiscal-revenue-mobilization-and-digitally-traded-products-taxing-at-the-border-or-behind-it-538487.
[7] IMF et al. (2023), “Digital Trade for Development”, https://www.wto.org/english/res_e/booksp_e/dtd2023_e.pdf.
[1] OECD (2025), The OECD Index of Digital Trade Integration and Openness (INDIGO), OECD, Working Party of the Trade Committee, https://one.oecd.org/document/TAD/TC/WP(2024)8/FINAL/en/pdf?sessionId=1741697038328.
[10] Schuknecht, L. and R. Pérez-Esteve (1999), “A Quantitative Assessment of Electronic Commerce”, Staff Working Paper ERAD, No. 01, WTO, Geneva.
[12] Teltscher, S. (2000), “Tariffs, Taxes and Electronic Commerce : Revenue Implications for Developing Countries”, Policy Issues in International Trade and Commodities Study Series, No. 5, UNCTAD.
[5] WTO (2026), Joint Statement Initiative on E-commerce (WTO website), https://www.wto.org/english/tratop_e/ecom_e/joint_statement_e.htm.
[6] WTO (2026), Members adopt a pathway to bring E‑Commerce Agreement into force via interim arrangements, https://www.wto.org/english/news_e/news26_e/mc14_28mar26_341_e.htm.
← 2. This is because the impact of changes in the INDIGO scores on trade differ across sectors (Bekkers, Lopez-Gonzalez and So, 2025[4]).
← 3. The structural gravity model in (Bekkers, Lopez-Gonzalez and So, 2025[4]) does not find a statistically significant association between changes in digital trade integration and changes in exports of natural resources.
← 4. On 3 December 2025, the Philippines was added to the WTO Members supporting the incorporation of the AoE into the WTO architecture in a communication to the general council: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/WT/GC/W963R1.pdf&Open=True .
← 5. “Born digital” trade is identified as that which does not have a physical equivalent, for example, cloud computing (which cannot be done on physical carrier media).
← 6. In the absence of information about what tariffs countries might apply on electronic transmissions, using tariffs on digitisable goods can be a useful proxy. See (Andrenelli and Lopez-Gonzalez, 2023[14]) for a discussion.