Impact of Digital Economy Agreements on ASEAN Development: Estimates from a CGE Model

Jing Zhi Lim, Mun-Heng Toh and Taojun Xie

No 333441, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Technology strategy and governance have turned from a priority to an imperative for firms and governments alike in today's digital economy. Paving the way for the future, ASEAN has entered discussions for an ASEAN Digital Masterplan in 2025 to improve economic integration, and promote inclusive, sustainable growth for the region. We conduct a computable general equilibrium analysis of the impacts of the DEA on the signatories' economies, the ASEAN region, and the world. We find that DEAs will positively increase the output of the ICT sector and has downstream benefits for the business services & financial sector, increasing their output by an average of 6.78%. The DEAs which aim to improve the interoperability of digital systems between countries will also increase inter-regional trade by an average of 7.27%. Data localization clauses that are overly restrictive may be counterproductive and decrease the ICT sector's sectoral output. We also find that countries with a higher proportion of unskilled labor would see the most considerable growth in demand for skilled labor in ICT, reiterating the importance of reskilling the workforce.

Keywords: International Relations/Trade; International Relations/Trade (search for similar items in EconPapers)
Pages: 30
Date: 2022
New Economics Papers: this item is included in nep-ict, nep-int, nep-mac and nep-sea
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