The 6th ASEAN Digital Ministers’ Meeting (ADGMIN) was concluded in Hanoi, Vietnam, on 16 January 2026, celebrating the adoption of the new ASEAN Digital Masterplan 2030 (ADM 2030). The meeting embraced the use of emerging technologies towards ASEAN’s goal of advancing regional digital development while addressing current deficiencies and opportunities for improvement. ASEAN Member States identified priority topics including AI governance and ethics, submarine cable protection, cybersecurity and anti-scam policies, and mobile roaming tariffs reduction.
ASEAN’s overture to thoughtfully shaping its partnerships beyond the region was also highlighted through cooperation efforts with various dialogue partners. Each of them prioritised different cooperation points. For instance, ASEAN and China renewed their exchange in the field of AI advancement, policy, and strategy alignment, while Japan pushed for the development of sovereign, tailor-made AI models in Southeast Asia to alleviate the concern of overdependency on foreign technology.
Similarly, in its engagement with the EU, ASEAN reaffirmed the benefits of shared ongoing projects, such as SCOPE-Digital, and acknowledged Europe’s growing significance as a dialogue partner. ASEAN and the EU are working together closely in digital cooperation by collaborating to improve secure and trusted connectivity, AI governance, efforts to combat online scams, digital standards, digital trade, and environmental observation.
What’s on the EU’s radar
The ADGMIN highlighted the relevance of Southeast Asia as a rapidly developing region in the deployment of digital technologies, especially amid global competition for AI innovation. In this realm, the EU has significant interests in enhancing its cooperation and exchange with ASEAN, as cultivating this partnership can reinforce economic ties, promote investments, and bolster global regulatory convergence. The AI market in ASEAN was valued at 7.5 billion EUR in 2025; a number which is expected to double within five years, making it one of the most attractive markets for EU companies and investors. This momentum is already visible in companies such as Mistral, SAP, ASML, and Deepl, which have begun establishing a presence in Southeast Asia, aiming to capture early advantages as the region scales.
From a policy perspective, the EU also holds considerable stakes in promoting its regulatory approach in the region to stimulate sustainable global AI governance. These interests are reflected in the EU Strategy for cooperation in the Indo-Pacific, which ranks digital governance as one of its key priorities for regional cooperation. The strategy identifies the launch of Digital Partnership Agreements with individual states, such as the EU-Singapore Digital Partnership (EUSDP) signed in 2023, to allow the expansion of digital trade, promote trust, and save costs for businesses and investors. In addition, it underscores the commitment to develop technological standards and regulations in line with the EU’s values and principles.
In pursuit of this goal, the EU AI Act can operate as a global baseline for emerging technologies. The newly adopted ADM 2030 opens the doors towards a crucial partnership between ASEAN and the EU, especially by recognising the importance of developing globally-aligned AI risk classification frameworks. The accompanying ASEAN Guide on AI Governance and Ethics, which sets a regional blueprint towards safe AI adoption, also recognises the influence of the EU AI Act, especially as a response to the similar needs of ASEAN in ensuring a safe use of AI.
To consolidate the credibility of the partnership, the EU-ASEAN Global Gateway serves as a convenient platform. Investments allow member states to improve connectivity, reduce disparity, boost secure connections, and promote cross-sectoral research and development while acknowledging environmental, sustainability, and education issues.
Why Europe matters for ASEAN
Both ASEAN and Europe are often considered as lagging behind the global competition for AI dominance, especially as China’s Deepseek and the US’ ChatGPT lead the global market. However, in this scenario middle powers have a unique chance to cooperate towards the development of a joint AI challenger by stimulating the free exchange of knowledge and investments. Europe and ASEAN countries, as middle and emerging middle powers in the global system, have the potential to shape global AI governance standards by acting collectively. As two regional organisations with aligned goals and priorities, ASEAN and the EU can naturally foster cooperation and development through their shared frameworks for economic and political collaboration.
Southeast Asia is quietly emerging as a technological hub for AI development, a priority explicitly set out in the ADM 2030 as part of efforts to strengthen ASEAN’s global agency. AI is a vital tool for the multitude of micro and small enterprises that constitute ASEAN’s market. Therefore, ASEAN’s priority is to develop a unique approach to AI that aligns with the needs of its member states’ citizens. To this goal, European countries are uniquely positioned to become ASEAN’s preferred partner in AI, offering not just regulatory expertise but also the investments and capacity-building needed to drive innovation. Rather than being limited to the EU, such a partnership could encompass a wider, border-less European innovation space, including EFTA member states and the UK. This approach would allow ASEAN to access additional resources, particularly Switzerland’s leading innovation economy and the UK’s proactive regulatory sandboxes.
ASEAN-based companies such as AISG’s SEA-LION, Grab, and Vietnam’s FPT have already begun their expansion into the European markets, signaling growing cross-regional synergy in digital technologies and AI. This trend underscores the potential for deeper collaboration in AI development and deployment.
Bilateral agreements as testing grounds for digital convergence
The EU-ASEAN Partnership in the digital sector is not necessarily pan-regional. Rather, it can develop at the country level, allowing for the gradual expansion of trade relations with individual member states. The EU can currently boast three trade deals: the EU-Singapore Free Trade Agreement (EUSFTA), the EU-Vietnam Free Trade Agreement (EVFTA), and the EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA). At the same time, three agreements are under negotiation, namely with Malaysia, the Philippines, and Thailand. Moreover, EFTA has already concluded FTAs with five of the eleven ASEAN Member States: Malaysia, Singapore, the Philippines, Indonesia, and Thailand. Notably, the EFTA–Singapore FTA is complemented by a dedicated Digital Economy Agreement (DEA), which explicitly addresses emerging technologies, including AI and responsible AI governance cooperation. In parallel, the UK has concluded bilateral FTAs with Singapore and Vietnam and is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), reinforcing its regulatory and trade engagement in Southeast Asia’s digital economy. Building on this existing network would allow the EU to draw lessons from EFTA’s and the UK’s pragmatic engagement models, lower entry barriers for cooperation, and progressively expand regulatory alignment in digital and AI-related domains. The EU is not the sole actor engaged in trade negotiations with ASEAN. By synchronising more with other European players, such as EFTA and the UK, the EU can strengthen the European leverage globally.
Besides general FTAs, narrower Digital Partnerships such as the EUSDP can further encourage interoperability on AI governance and standards. Singapore has been an early mover in aligning with the key principles of the EU’s approach to AI governance. For instance, the Singapore Conference on AI in May 2025 highlighted risk assessment as a research priority for global AI safety, identifying the EU AI Act as a key specimen. Bilateral digital trade agreements as confidence-building measures can allow regulatory alignment and remove barriers to trade, opening a vast market for both European and Southeast Asian companies.
The role of AI is also gaining traction in the negotiations of forthcoming FTAs in the region. For instance, a renewed focus on AI and digital technologies has helped accelerate progress in the negotiations between Malaysia and the EU and reshape their trade relations. Likewise, this shared interest in AI can be observed in the Philippines and Thailand, enabling advancements in FTA negotiations.
The ASEAN-EU Joint Cooperation Committee has already evaluated in June 2025 how pilot sectoral agreements on areas of mutual interest, such as the digital economy, can strengthen credibility and demonstrate the benefits of a comprehensive FTA. Assuming the role of a partner in connectivity development can significantly improve mutual learning and partnerships, drafting the blueprint for other sectors such as digital and environmental regulations.
Practical challenges to deeper integration
While the ADGMIN paved the way for improved digital partnerships between ASEAN and the EU, some challenges remain. First, ASEAN’s divergent national approaches to digital development and connectivity have contributed to internal fragmentation in regional coordination, resulting in uneven alignment with foreign initiatives. This unevenness is also reflected in the Government AI Readiness Index 2025, which shows substantial capability gaps across ASEAN member states. While countries like Singapore rank among the top global performers, five of the eleven ASEAN Member States trail behind the global average. The reason can be traced back mainly to technical constraints such as infrastructure gaps, regulatory complexities, and skill gaps. These deficiencies ultimately complicate data sharing and cross-border interoperability, while testing ASEAN’s ability to align infrastructure expansion with sustainable energy development.
At the same time, the EU faces its own challenges in enhancing digital partnerships due to the architecture of its AI regulations. Some ASEAN member states, particularly those with less developed digital infrastructures, are likely to show reluctance towards a European approach to AI governance, specifically under the burden of compliance costs posed by the EU AI Act. Research shows such expenses can reach as much as 400,000 EUR for Small and Medium-sized Enterprises (SMEs) using AI products considered high-risk under this regulation. Given that Micro, Small, and Medium Enterprises (MSMEs) account for between 97 and 99% of ASEAN’s businesses, the EU’s approach to AI governance can appear less appropriate for countries that wish to focus on research and development. More broadly, ASEAN’s principle of non-interference has encouraged a governance style that relies on guidance and voluntary coordination rather than binding regulation. This helps explain why the EU’s regulatory model can be perceived as a poor fit for parts of the region. To address this issue, the previously mentioned EUSDP with Singapore can serve as a model for negotiating flexible implementation mechanisms for SMEs in line with ASEAN’s developmental needs.
Lastly, the EU itself faces its own internal fragmentation and coordination challenges. The delays in the implementation of the EU AI Act among its member states highlight the challenges to achieving uniform compliance within the EU, ultimately hindering its credibility of setting global AI standards.
Taken together, these complexities make ASEAN’s regulatory alignment harder amid competition between different global models of AI governance. As the development of AI in Southeast Asia advances, Large Language Models (LLMs) of American, Chinese, and European origin have all made their way into the market. While recent trends demonstrate an increasing diversity in the products’ countries of origin, shifting from dependence on a single dominant company to sourcing from several, this diversification of investments does not necessarily reduce pressure on ASEAN’s approach to AI governance. Instead, it introduces competing regulatory frameworks, compliance requirements, and technical standards. The result is not limited to market fragmentation, but the development of multiple, divergent AI systems under overlapping regulatory systems risks fracturing the region’s AI ecosystems and governance regimes.
Amid global competition, the danger for the EU is to lag behind, especially if it acts as a rival rather than a partner. The US is leveraging its technological advantage and innovation-driven model to scale exports and embed its systems across markets. Simultaneously, China remains highly influential in Southeast Asia’s digital infrastructure through extensive investment, while Japan has stepped into the competition with its proposal to develop language-specific models tailored to ASEAN Member States. If the EU seeks to establish new digital partnerships in the region, this multitude of opportunities risks depreciating the union’s cautious and regulatory approach. Digital partnerships could still strengthen trade and investments while encouraging convergence with the EU approach to AI governance. However, this will depend on the EU’s ability to match the pace of investments shown by ASEAN’s global partners.
A path forward towards a collaborative future
As digital cooperation between ASEAN and the EU advances, it is crucial to cultivate a constructive partnership and avoid being dragged away by great-power dynamics.
Digital partnerships are becoming central to economic resilience, while responsible AI governance is increasingly treated as an international baseline. With the expansion of the digital market in ASEAN, the path is open for mutual cooperation with European countries. ASEAN has already proven convergence to EU regulations in the digital sector, and it has the power to pilot the adoption of AI governance frameworks in line with the EU AI Act. A comprehensive digital partnership would thus have twofold advantages, responding to both regions’ needs and wants. A closer digital cooperation between ASEAN and Europe, including the EU, EFTA member states, and the UK, would create a market of over 1.2 billion people, strengthening cross-border unity while supporting innovation ecosystems able to compete globally.
To pursue its interests, the EU should not be doubtful about promoting its approach to AI to global partners. Ad hoc joint projects are ideal to promote mutual learning and secure legislative confidence. Moreover, the establishment of digital partnerships at the individual state level is a helpful vehicle towards the conclusion of all-encompassing trade agreements. Investments are the core instrument to secure a mutually equitable partnership and empower ASEAN through the Global Gateway.
Yet, the EU must also navigate the risk of overregulation, which can intimidate global partners and hinder collaboration. Strict regulations, non-competitive investments, and difficult cross-border scaling can lead to the outflow of innovation, as in the emigration or foreign acquisition of local start-ups. To promote itself as an advantageous partner in ASEAN, the EU should maintain a pragmatic stance, enhancing regulatory clarity to ensure that its frameworks support SMEs and align with global innovation trends.
By striking this balance, European and Southeast Asian countries can consolidate a firm partnership in the digital domain and position themselves as a global alternative of the only two successful regional initiatives in comparison with the so-called superpowers, US and China, in shaping inclusive, innovative, and secure AI governance frameworks.
Author: Giacomo Arosio, EIAS Junior researcher
Photo credits: pixabay