Author: Manoj Harjani, RSIS

On April 21, 2021, the European Union announced law Project to harmonize the rules of its member states on artificial intelligence (AI). The goals of the legislation are potentially desirable for many countries in Southeast Asia, especially given growing concerns about the risks associated with AI and intensification of rivalry between China and the United States.

A key aspect of the EU proposal is to classify AI-based systems according to four risk levels, ranging from unacceptable to minimal. This is supported by specific obligations when deploying high risk systems. To avoid penalties, system suppliers will need to demonstrate compliance before and after deployment in the market. The bill is supplemented by an update of existing legislation AI coordination plan aimed at aligning policies between EU Member States. The update also provides for at least € 1 billion ($ 1.2 billion) per year in AI-related investments from 2021 to 2027.

The EU’s decision to align AI policies at the regional level will be increasingly relevant for South East Asia. Competitively Priced Technology Exports Facilitated by China Digital Silk Road initiative will see many countries in Southeast Asia accessing AI technologies through Chinese companies. Technology is not neutral and it is possible to simultaneously import standards and values ​​represented in the design choices of system vendors.

Some degree of political expediency might also be at stake. Invited by concerns about abuse, some American companies like IBM have pushed to limit exports of AI technology involving facial recognition. On the other hand, Chinese companies have demonstrated their willingness to export this technology despite such concerns. Chinese tech companies like Huawei, Hikvision, Dahua, and ZTE are Drivers of a global increase in AI-based surveillance, with exports to several countries in Southeast Asia.

Southeast Asian countries have experience with EU General Data Protection Regulation (GDPR) compliance. The broad extraterritorial reach of the GDPR has led many countries in Southeast Asia to model their own legislation on similar principles. The draft EU AI legislation may have an impact similar to this’Brussels effect‘.

Most countries in Southeast Asia are not yet heavily involved in the production of AI-based systems, and these products and services do not constitute a significant part of trade between the two regions. Singapore is an exception, having adapted its national AI strategy towards AI-based solutions in the global market. The ‘Brussels effect’ of draft EU AI legislation may be limited in South East Asia for now, although the region will likely review EU provisions to determine their relevance to their own political goals. Rather, Southeast Asian countries are more likely to find common cause with the EU’s economic strategies outlined in its AI coordination plan.

A major obstacle to South East Asia’s adoption of the EU strategy is that the region is comparatively much less integrated as a market and regulatory environment. But ASEAN is taking steps in the right direction. At its first meeting of digital ministers in January 2021, the bloc adopted the ASEAN Digital Master Plan 2025 calling for a regional policy to provide advice on best practices in AI governance and ethics.

The plans might not translate into further integration, especially if implementation is voluntary and left to the discretion of member states. In addition, ASEAN must address existing regulatory potholes for cross-border data flows – essential for the development of AI-based systems – resulting from personal data localization requirements in its member states. the standard contractual clauses for cross-border data flows launched in January 2021 can help address this issue if adopted broadly and consistently.

The ratification of free trade agreements with provisions allowing cross-border data flows will have the greatest impact for the adoption of legislation on AI. Unfortunately, ASEAN’s flagship trade deal – the Regional Comprehensive Economic Partnership – allows parties to impose restrictions on cross-border data flows as long as they apply to both domestic and foreign companies. Again without applicable dispute resolution mechanism, countries can potentially get away with discriminatory restrictions.

Only two of the four ASEAN signatories of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership – Singapore and Vietnam – have ratified the agreement and implemented its “benchmark” digital trade provisions supporting cross-border data flows. Singapore has gone further by signing digital economy agreements with Chile and New Zealand in June 2020, and Australia in December 2020, which include specific provisions for cooperation on ethical governance of AI. Singapore’s approach remains an outlier in the region.

Most ASEAN member states have launched or are developing national AI strategies and governance frameworks. These could eventually form the basis for a more coordinated regulatory environment for AI in the region. A sectoral approach – focusing on AI in financial services, manufacturing or healthcare – could help gradually build common ground for broader coordination of AI policies and adoption of consistent regulations across the board. the whole block.

Manoj Harjani is a researcher in the Future Issues and Technology pole of the S Rajaratnam School of International Studies, Nanyang Technological University, Singapore.

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