Intellectual Property Law

Asean Free Trade Agreement and its Relevance for E-commerce

By Martha L. Arias

The Asean Free Trade Agreement -AFTA, definitely plays a significant role in the development of e-commerce among ASEAN nations.  ASEAN is the Association of Southeast Nations, with 10 member states and an estimated population of 575.5 million.  ASEAN members are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore,  Thailand, and Vietnam; this regional economic group presented a GDP of US$ 3,431.2 billion for the year 2007.  ASEAN nations signed AFTA in 1992 in Singapore to create a free trade area for goods, services, and investment for the info-communication industries.   Even though e-commerce is still incipient among ASEAN nations, its potential is colossal taking into account its population and the regional agreements ASEAN has signed with third countries such as Australia/New Zealand, India, and the European Union.      

AFTA includes several e-commerce-relevant provisions.  First, it includes measures to facilitate e-commerce among ASEAN members.  These measures require member states to (i) facilitate the growth of e-commerce in and among ASEAN countries; (ii) develop an "e-society" in ASEA.  This means, educational programs should be implemented to create awareness and inform of the benefits of the Internet, foster the development of a "knowledge-based society," and use ICT to "enhance the spirit of ASEAN community;" (iii) increment e-government services; and (iv) adopt an e-commerce framework that facilitates e-commerce among businesses and provides users' trust in these services.   According to Art. 5.1, members states shall adopt and develop these e-commerce measures expeditiously and following international norms and standards.  

Second, AFTA also requires member states to adopt appropriate measures to protect intellectual property (IP) rights arising from e-commerce.   Most ASEAN countries have already modified their IP codes to include rules against piracy, copyright infringement, and to straighten enforcement actions against IP violations.  

Third, other e-commerce relevant provisions included in AFTA are the establishment of data protection and consumer privacy rules in each ASEAN member state and the adoption of alternative dispute resolution mechanisms (ADRM) for disputes arising from online transactions.   Most ASEAN countries have already adopted ADRM in their domestic legislations but the establishment of data protection and privacy rules is still in process for the majority of ASEAN members. 

Fourth, AFTA includes several provisions on information and communications technology (ICT).  AFTA defines ICT as "infrastructure, hardware and software systems, needed to capture, process and disseminate information to generate information-based products and services."  Member states are required to co-operate among them (i) to improve competitiveness in the ICT sector; (ii) reduce the "digital divide;" (iii) open free trade in ICT products and services; (iv) open their ICT markets to ASEAN foreign investors to whom national treatment should be provided; and (v) harmonize the ICT nomenclature. Also, AFTA requires member states to promote co-operation between their domestic private and public sector to facilitate the implementation of "e-ASEAN" program. Art. 3 requires member states to develop or enhance national ICT to facilitate interconnectivity and technical inter-operability among member states.  An ASEAN Information Infrastructure backbone is also required to facilitate high-speed connection.   

The liberalization of the economies and regional free trade agreements are definitely the ground-breaking steps for the e-commerce culture.  The liberalization of the economy facilitates foreign investment in the telecommunication sector, vital for e-commerce transactions.  Additionally, free trade agreements always introduce specific rules on intellectual property, customs tariffs, telecommunications, ICT, and alternative disputes resolution mechanisms, among others.  These are core elements for successful e-commerce transactions.  As we see with AFTA and other ASEAN agreements, Southeast Asian countries are claiming its role in the e-commerce market.        

Full post as published by IBLS Internet Law Blog on November 12, 2008 (boomark / email).