The main questions for 2025 are:

Will efforts to conclude an ASEAN DEFA result in an ambitious and commercially meaningful arrangement among ASEAN member states, or will efforts to quickly conclude the agreement result in lower-standard outcomes or wide-open exceptions to commitments?
Will the United States play a constructive role in digital trade discussions in the region, or will it remain on the sidelines of the emerging regional economic architecture?

2. Regional backsliding on digital trade

Another important area to watch is whether, instead of building on previous generations of digital trade agreements, such as the commitments in the e-commerce and other chapters of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the region will backslide.

Two illustrative symptoms of backsliding in the APAC region would be:

The conclusion of a low-ambition ASEAN DEFA that uses the exceptions and limitations provisions from the Regional Comprehensive Economic Partnership (RCEP) or sidesteps commercially meaningful commitments on data transfers, data localization, source code disclosure requirements, the imposition of customs duties on electronic transmissions, and other crucial disciplines instead of building on the CPTPP and Singapore-led digital economy agreements.
The accession to the CPTPP and DEPA of countries with domestic policies known to run counter to the letter and spirit of these two agreements.

Both scenarios will significantly hinder efforts to knit together a regional consensus on digital trade and best practices for domestic policy.

3. The proliferation of AI-related policies

Countries throughout the Asia-Pacific have been concerned about AI-related policies for over half a decade, with efforts in Australia, India, Japan, Korea, Singapore, and many others to promote ethical AI, transparency, fairness, and explainability — meaning the ability of an AI model to produce output that humans can understand — while reducing the risks associated with bias in the recommendations of predictive algorithms. With the November 2022 launch of ChatGPT and the explosion of attention on large language models and generative AI, the pressure on policy makers to identify and address the perceived risks of AI is greater than ever. Most policy makers throughout the Asia-Pacific are keenly aware of the transformational potential of AI on economic development and productivity and appear to be highly reluctant to introduce legally binding rules limiting AI without thoroughly considering the costs and benefits of such rules.

Many countries, with Singapore as a prime example, have focused on providing detailed guidance to companies, especially small companies and start-ups, and citizens, without imposing legally binding obligations.