ASEAN countries to facilitate cross-border e-commerce transactions
Economic ministers from the Association of Southeast Asian Nations (ASEAN) entered into the grouping’s first ever agreement on e-commerce to facilitate cross-border e-commerce transactions within the region. The agreement was finalized after hectic nine rounds of negotiations with the main objectives being to facilitate cross-border e-commerce transactions, to foster an environment of trust and confidence in the use of e-commerce and to broaden cooperation among ASEAN countries to further develop and intensify the use of e-commerce to drive regional economic growth.
Delivering his opening remarks at the 17th ASEAN Economic Community Council meeting, trade and industry minister Chan Chun Sing said: “This agreement will help bolster the trust and confidence of ASEAN consumers in e-commerce and drive adoption. In doing so, we will enable ASEAN businesses to grow domestically, regionally and globally,” he said. The minister also referred to non-tariff barriers, including logistics and cross-border digital regulations that remain as challenges for small and medium-sized enterprises looking. He also talked of encouraging paperless trading between businesses and governments, which can generate more rapid and efficient transactions between ASEAN countries.
During the meeting, the member countries committed to implementing domestic regulatory frameworks, to being transparent, to cooperating on tech, infrastructure and logistics, education, consumer protection, legal safeguards, banking, payment, transaction and trading systems and data regulation usage and flow and at the same time also showing commitment towards being technology neutral to ensure that businesses in each market are free and able to make tech choices that best fit the open market and their needs.
This agreement will undoubtedly spur further growth of online sales across the region. The region has witnessed sustained economic growth and has a young, digitally-savvy population. Consequently, ASEAN countries’ internet economy is expected to hit US$ 200 billion by 2025, of which E-commerce is expected to grow to US$88 billion. Several foreign players like Amazon and Alibaba have got lured to the region seeing its great potential. At the same time, ASEAN-based companies like Singapore’s Lazada and Indonesia’s Tokopedia too have grown significantly to capture a significant market-share.
The new agreement will provide access to a wider range of products to the consumers of the region. A better range will be available at more competitive prices. Moreover, this agreement is likely to spur local entrepreneurs to create new products and to venture online to access a large and more diverse market. Even small and home businesses will get a bigger market and a broader consumer base.
The agreement has also put in place online dispute resolution mechanisms to facilitate e-commerce claims and consumer disputes. Marketplaces will have to come up with framework policies, tracking and tools so as to avoid abuse, fraud and fakes. This also means that trust and credibility will play an important part. Al this will help gain the consumer confidence and spur further growth of online sales across the region. Companies will eventually get more business.
It is expected that the global cross-border sales will reach 627 bn by 2022. The Asia-Pacific region is expected to be the largest contributor in terms of growth.