Introduction In today’s changing global economy, regional cooperation is more important than ever. For Central Asia Regional Economic Cooperation (CAREC)[1] countries, working together is key to solving shared problems and building a stronger future—transforming from landlocked region to a land-linked and digitally connected region. Positioned at the crossroads of Asia and Europe, the CAREC region holds immense strategic importance. However, there is a stark disparity: intra-CAREC trade (excluding People's Republic of China) accounts for only 7% of total trade, compared to ASEAN’s 24% in 2023. This gap is largely attributed to fragmented logistics, regulatory misalignment, limited digitalization, and weak coordination. Building on the discussions from the 5th CAREC Annual Research Conference held on 29–30 May, this article explores the current volume of digital trade, the challenges contributing to the stark disparity between the two regions, and proposes solutions to enhance trade in the region. Digital Trade Snapshot: CAREC vs. ASEAN Digital trade encompasses all trade that is either digitally ordered (both goods and services) or digitally delivered (services only). Given data limitations, particularly on digitally ordered trade or cross-border e-commerce, the table below provides a snapshot of digitally delivered trade—both exports and imports—for CAREC and ASEAN member countries in 2024. Excluding the PRC, CAREC’s total digitally delivered trade stood at $35.76 billion, compared to $548.46 billion for ASEAN. ASEAN countries, even excluding Singapore, show more balanced digital trade distribution compared to CAREC, where PRC’s dominance skews the total. Table 1: Digitally Delivered Trade for CAREC and ASEAN Members in 2024 CAREC Member Country Digital Trade ($ million) ASEAN Member Country Digital Trade ($ million) Afghanistan[2] 524 Brunei 602 Azerbaijan 6,635 Cambodia 1071 China, People’s Republic of 385,764 Indonesia 38,096 Georgia 2,184 Lao People’s Democratic Republic 143 Kazakhstan 7,909 Malaysia 39,038 Kyrgyz Republic 3,475 Myanmar 997 Mongolia 1,603 Philippines 38,567 Pakistan 7,928 Singapore 369,821 Tajikistan 216 Thailand 50,570 Turkmenistan 3,210 Viet Nam 9,557 Uzbekistan 2,079 Total 421,527 548,462 Source: WTO. 2025. Digitally Delivered Services Trade Dataset. Challenges: Comparative Analysis of CAREC and ASEAN Digital Trade Digitalization holds transformative potential for trade facilitation across both CAREC and ASEAN regions. However, the pace and depth of regulatory readiness vary significantly, shaping each region’s ability to harness digital trade opportunities. CAREC countries Despite technological advancements, digital trade in the CAREC region faces significant hurdles. Key challenges include underdeveloped digital infrastructure—such as poor internet connectivity, lack of internet exchange points, and absence of data centers—fragmented regulatory frameworks, limited electronic transaction systems, weak enforcement of data protection and privacy laws, and inadequate consumer protection. The existing literature on digital trade reforms in CAREC member countries shows that while there is a region-wide push toward cross-border digital trade, progress remains uneven. CAREC member countries have established domestic electronic single-window systems and customs automation, resulting in substantial savings in terms of cost and time. However, the implementation, functionality and scope of these systems vary across countries. The absence of a unified regional single window presents a major barrier to enhancing cross-border digital trade. Furthermore, several CAREC member countries, including Georgia, Kazakhstan, and Pakistan, have yet to ratify the UNESCAP Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific, which aims to enable and accelerate the implementation of digital trade facilitation measures. Most CAREC countries have established legislation on electronic transactions, privacy, and data protection. Cybercrime laws also exist in the region. On consumer protection, only the PRC and Kazakhstan have completed their legislation, while Azerbaijan and Kyrgyz Republic have draft legislation. ASEAN countries ASEAN member states have demonstrated stronger regional commitment to digital transformation. Most have enacted comprehensive legislation in the same four domains. Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam lead with mature and robust digital regulatory environments, while Cambodia, Lao People’s Democratic Republic, and Myanmar are still refining their frameworks regarding cybercrime, data protection and privacy, and consumer protection legislation, respectively. This regulatory maturity enhances trust, reduces transaction costs, and enables seamless cross-border e-commerce and data flows. Trade implications The disparity between CAREC and ASEAN in digital readiness has direct implications for trade. ASEAN’s harmonized and comprehensive digital laws position it as a competitive and attractive region for digital investment and innovation. CAREC, on the other hand, faces challenges in interoperability, trust, and compliance with international standards, which hinder its connectivity and integration into global digital markets. Solutions to Enhance Regional Digital Trade Given the relatively low levels of both trade and digital trade in the CAREC region, there are several solutions that can foster deeper regional integration and unlock digital trade potential. Long-term policy framework and coordinated implementation: Harnessing the potential of digitalization for trade facilitation requires a strategic vision, a long-term policy framework, and coordinated implementation across all CAREC member countries. The PRC’s Internet Plus and Economies of Scale, Digital Denmark, e-Estonia, and Singapore’s Smart Nation Initiative demonstrate how this approach can transform countries into global digital leaders. CAREC countries can harness global and regional initiatives to boost domestic and cross-border e-commerce and advance digital trade. Regulatory alignment and trade facilitation: Regulatory barriers, including inconsistent customs procedures and fragmented digital laws, hamper trade. A unified regional single digital window can simplify documentation, reduce delays, and enhance transparency, while enabling legislation and harmonized digital regulations will support smoother regional integration. Smart infrastructure for seamless trade: Establishing digital trade corridors and regional digital markets, and supporting integration into global value chains will enable seamless e-commerce and data exchange. Upgrading to smart ports and borders—with Internet of Things, artificial intelligence, and green technologies—will reduce clearance times and improve logistics efficiency. Digital infrastructure development, including internet exchange, data centers, and payment interoperability, are inevitable for improving digital trade among CAREC member countries. Cross-border data and digital inclusion: Creating mechanisms for cross-border data flows, including model laws and mutual recognition agreements, is vital for secure digital transactions. Equally important is investing in digital skills, especially for women and youth, to ensure inclusive growth and long-term success in the digital economy. [1] CAREC is composed of Afghanistan, Azerbaijan, People’s Republic of China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. [2] ADB placed on hold its assistance in Afghanistan effective 15 August 2021. Notes: Nasruminallah Mian, Head of Programs/ICT, Pakistan Resident Mission, Asian Development Bank, contributed to this article. The 5th CAREC Annual Research Conference brought together 200 policymakers, researchers, and development experts from CAREC member and other countries in Europe and East Asia to explore and discuss challenges and solutions for advancing CAREC connectivity, with a focus on promoting trade and trade facilitation. Hosted by Pakistan, it highlighted the need to accelerate regional cooperation and integration for shared prosperity. Resources ASEAN Statistics Division. 2024. Exploring Intra-ASEAN Merchandise Trade Dynamics. ASEAN Statistical Brief. VIII. CAREC Program. 2020. Trade Sector Report and Work Plan. CAREC Program. 2022. E-Commerce in CAREC Countries: Infrastructure Development N. Mian. 2024. Pakistan's Quest for Economic Growth through Digital Transformation. Criterion Quarterly. 19-3. P. Crivelli and R. Avendano, ed. 2025. The Role and Future of Digital Economy Agreements in Developing Asia and the Pacific. ADB. United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). 2024. Digital and Sustainable Trade Facilitation in the Central Asia Regional Economic Cooperation. Ask the Experts Asmat Ullah Regional Cooperation Coordinator, Pakistan Resident Mission, Asian Development Bank Prior to joining ADB, Asmat worked as a Program Officer for Private Sector Development with the Japan International Cooperation Agency. His interests and publications focus on regional cooperation, digitalization, poverty reduction, rural development, and youth and women development. He holds a master’s degree in Social Policy and Development from the London School of Economics and Political Science. Leave your question or comment in the section below: View the discussion thread.