Full webinar recording: https://www.youtube.com/watch?v=TTtrPdjF0do
Overview
On 11 December 2025, the ASEAN-Japan Centre hosted the webinar “The Role of AI Governance in Trade: Lessons from ASEAN and Japan” under the ASEAN-Japan Insights Series. The event brought together policymakers, business leaders, and researchers from ASEAN and Japan to discuss how AI governance frameworks can support digital trade, innovation, and cross-border collaboration.
Executive Summary
Japan’s human-centric, risk-based, soft-law approach to AI governance—anchored in the AI Guidelines for Business and the 2025 AI Act—offers a pragmatic reference model for ASEAN. However, ASEAN’s diversity in regulatory maturity, institutional capacity, and private-sector readiness necessitates interoperability rather than harmonization, and operational tools rather than abstract principles.
The discussion converged on a shared conclusion: ASEAN–Japan cooperation should now shift from dialogue to implementation, focusing on joint sandboxes, shared risk frameworks, capacity building, and SME-friendly governance mechanisms that enable innovation while building trust.
The following speakers presented on the following topics:
- Rio Kiantara, Head of Research, ASEAN Business Advisory Council (ASEAN-BAC) (speaking on behalf of Executive Director Rifki Weno), discussed opportunities and challenges in operationalizing Japan’s AI Guide for Business in Southeast Asia, with emphasis on practical needs, business expectations, and private-sector perspectives. Link to Presentation: Link
- Shiho NAGANO, Director for Information and Policy Planning, Commerce and Information Policy Bureau, Ministry of Economy, Trade and Industry (METI), Japan, provided insights on Japan’s efforts in promoting responsible AI adoption for businesses, including policy developments, international coordination, and emerging regulatory approaches. Link to Presentation: Link
- Catherine Setiawan, 2025 Research Fellow, ASEAN-Japan Young Experts Fellowship (AJYEF), presented the findings of her study “AI Governance and Digital Trade: Lessons from Japan and the ASEAN Region,” showcasing Lazada’s AI tools as a case study of AI-enabled integration in e-commerce in Southeast Asia and outlining the current governance landscape, key risks, and opportunities for ASEAN–Japan collaboration. Link to Presentation: Link
- Dr. Lili Yan Ing, Lead Advisor for Southeast Asia, Economic Research Institute for ASEAN and East Asia (ERIA), examined strategies for bridging AI governance gaps in Southeast Asia, highlighting regulatory fragmentation, capacity constraints, and potential avenues for deeper ASEAN–Japan cooperation. Link to Presentation: Link
Here are the main takeaways from the presentations:
- AI Adoption and Governance Gaps Despite Shared Economic Ambitions
ASEAN’s digital economy is projected to reach USD 1 trillion by 2030, representing roughly 10% of the global digital economy. AI is projected to raise GDP by 10–18% across ASEAN and Japan by 2030, but significant governance and operational gaps remain.
- Japan Leads in Global and Agile AI Governance
Japan’s voluntary, risk-based “AI Guidelines for Business” serve as a dynamic “living document” that evolves with technological development. Japan’s governance ecosystem is reinforced by its global leadership initiatives in AI—including the Hiroshima AI Process and the planned AI Act of 2025—which aim to balance innovation with mitigating emerging risks.
- ASEAN’s Structural Barriers: Trust, Talent, and Fragmented Regulations
ASEAN’s AI readiness remains uneven. Businesses struggle with a trust deficit due to opaque algorithmic processes; severe shortages of technical–ethical hybrid talent; fragmented national regulations; and persistent challenges around data availability, quality, and interoperability.
- Data Governance as the Foundation of Digital Trade
Effective AI governance relies on sound data governance, ensuring accurate, reliable, and secure data inputs. Agreements such as the ASEAN Digital Economy Framework Agreement (DEFA) are expected to play a central role by supporting cross-border data flows, digital trust, and interoperable digital infrastructure across Southeast Asia.
- Trade Agreements Support AI Indirectly, Not Explicitly
Major trade agreements including the RCEP and CPTPP lack specific AI governance provisions, but they enable AI deployment through rules on e-commerce, cybersecurity, and digital operations. Stakeholders noted that incorporating explicit AI chapters may become increasingly necessary.
- ASEAN’s Priority: Practical and Interoperable Collaboration with Japan
Across the region, stakeholders strongly favor joint pilots, risk-based frameworks, and cross-border harmonization, with varying preferences among member states. ASEAN and Japan are encouraged to co-develop practical toolkits and adopt a modular, seven-pillar governance model to create a flexible regional baseline.
Meanwhile, the following are some of the critical points highlighted during the panel discussion, moderated by Dr. Katrina Navallo, Programme Manager for the Research and Policy Advocacy Cluster at the ASEAN-Japan Centre:
- Trust and Practical Tools Are Essential for Businesses
ASEAN businesses emphasized that trust is not optional—it is a core business requirement. Stakeholders prefer actionable guidance such as checklists, templates, and toolkits rather than abstract policy documents.
- Critical Digital Trade Risks Remain Insufficiently Addressed
Key risks—including algorithmic bias, downtime, misinformation, and payment fraud—remain inadequately mitigated due to the non-binding nature of many ASEAN governance tools.
- ASEAN Must Overcome Fragmentation and Talent Shortages
Panelists highlighted the urgent need for common regional standards and enhanced talent development, emphasizing that fragmented regulations raise compliance costs and reduce digital trade efficiency.
- ASEAN–Japan Cooperation Should Prioritize Interoperability and Capacity Building
Concrete steps include shared regulatory sandboxes, talent and technical training, joint risk assessment frameworks, and harmonized data protection principles.
- Sustainable Digital Transformation Requires Reliable Energy Foundations
Effective AI and digital trade require stable infrastructure, with panelists highlighting the importance of transitioning to renewable energy—targeting 60% by 2030—to support data-intensive systems.
Moving Forward: ASEAN-Japan Cooperation on AI Governance in Trade and Business
The discussion emphasized interoperability rather than full harmonization as the most effective pathway for ASEAN–Japan cooperation on AI governance in digital trade. Key mechanisms include joint regulatory sandboxes, which would allow SMEs and startups to test AI-enabled trade solutions in a controlled environment, particularly in sectors such as manufacturing, logistics, e-commerce, trade finance, and agriculture. Complementing this, shared risk and interoperability frameworks—including common AI risk classification, aligned impact assessments, and interoperable data governance and audit expectations—would reduce cross-border compliance friction and enable mutual recognition of sandbox outcomes.
Speakers also highlighted the importance of capacity building and SME-centered governance to ensure inclusive adoption. Joint fellowships, talent exchanges, and targeted training programs can address persistent hybrid skill gaps, while the co-development of practical tools such as checklists, playbooks, and sector-specific guidance can translate principles into operational practice. At the same time, flexible, risk-based “soft governance” models are essential to protect users without stifling innovation, with targeted safeguards to ensure SMEs are not excluded from AI-enabled digital trade due to excessive compliance complexity.
About the ASEAN-Japan Insights Series
The ASEAN-Japan Insights Series is the Centre’s flagship bilingual platform for knowledge sharing on topics of strategic importance to ASEAN and Japan. The Series brings together experts from industry, academia, government, and research institutions to explore key issues shaping regional cooperation and future growth.
About the ASEAN-Japan Young Experts Fellowship (AJYEF) Programme
The ASEAN-Japan Young Experts Fellowship (AJYEF) Programme is a pioneering initiative of the ASEAN-Japan Centre that nurtures the next generation of thought leaders and practitioners in ASEAN-Japan relations. Through research, professional development, and engagement in policy dialogues, AJYEF Fellows contribute fresh perspectives on regional cooperation, emerging economic opportunities, and shared challenges.
For inquiries or participation in future webinars, please contact the Research and Policy Advocacy Cluster at info_rpa@asean.or.jp.
