SMALL and medium enterprises (SMEs) are set to benefit from expanded access to Southeast Asian markets as Asean edges closer to finalising its inaugural Digital Economy Framework Agreement (DEFA), a regional initiative aimed at harmonising digital trade across member states.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the agreement, which will be a key focus at the 57th Asean Economic Ministers’ Meeting (AEM) in Kuala Lumpur this week, is intended to lower cross-border barriers and create a more seamless digital trade environment for smaller businesses.
“Right now, if a Malaysian entrepreneur sells sambal on TikTok, exporting to Indonesia or Thailand can be a hassle because of customs and payment issues,” he said during a media briefing ahead of the AEM.
“With DEFA, we are working to harmonise product codes, streamline approvals and integrate payment systems across Asean.”
The agreement is expected to be concluded by the end of 2025, with stakeholders viewing it as a game-changer that will democratise access to regional trade, particularly for micro, small and medium enterprises (MSMEs).
“For SMEs, this means they don’t need a consultant or a big team to manage export paperwork. Everything can be done online, seamlessly across Asean,” Tengku Zafrul said.
“Without such a framework, only big companies tend to benefit from free trade agreements. But SMEs are the backbone of Asean’s economy. We want Asean to be inclusive, not just for large corporations.”
The DEFA initiative is set to extend beyond goods to include services, potentially transforming market access for digital professionals, freelancers, and service providers across the region.
Tengku Zafrul also highlighted sustainability as another core focus of Asean’s economic agenda, noting that environmental compliance is becoming a prerequisite for exporters.
“Large companies can invest to comply with these requirements, but smaller firms need support. That is why Asean has put in place a framework to assist them,” he said.
SMEs make up approximately 99 per cent of businesses across the Asean region, with large corporations accounting for only one per cent. Tengku Zafrul said the agreement was designed to level the playing field, ensuring that regional integration delivers shared benefits.
“This is why people question globalisation — it often benefits big companies. Asean must play its role to be more inclusive,” he said.
Beyond DEFA, the minister reaffirmed Asean’s importance as a driver of regional stability and foreign investment, pointing to major technology firms such as Microsoft and Google establishing operations in the region.
“Multinationals such as Microsoft and Google establish hubs here not just because of Malaysia’s domestic market, but because we are part of Asean’s integrated supply chain. That creates jobs for Malaysians.”
The 57th AEM, held at the Malaysia International Trade and Exhibition Centre (MITEC) from 22 to 26 September, is expected to provide the platform for advancing DEFA and other regional economic priorities.
“Malaysia on its own may be a mid-sized economy. But within Asean, we are part of a bloc of 680 million people with a US$3.8 trillion GDP,” said Tengku Zafrul.
“That scale makes investors pay attention and it means more opportunities for our SMEs and workers.” - September 22, 2025
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