Cross-border data flows are essential for economic growth and innovation, particularly in Asia’s rapidly developing digital economies in which digital trade drives regional integration. However, varying national priorities—such as digital sovereignty, privacy protection, economic competitiveness, and national security—have led to significant regulatory fragmentation across Asia. This regulatory diversity, combined with complex geopolitical dynamics, including China’s growing influence and the relative decline of U.S. leadership, has created barriers to seamless data exchange. In this shifting landscape, the rise of digital protectionism in Asia is increasingly undermining the role of the “Free Flow of Data” as a principle of international cooperation. Diverging approaches among regional powers and unilateral regulatory strategies by major powers are deepening asymmetries in global and regional data governance. Without coordinated frameworks, excessive fragmentation risks slowing economic growth, constraining innovation, and reducing opportunities for cross-border collaboration. To address these challenges, middle and emerging powers should form plurilateral partnerships to reconstruct data governance norms. By adopting a risk-based approach under Data Free Flow with Trust (DFFT), they can balance sovereignty with interoperability. Japan can lead this process through the “Tokyo Effect,” whereby shared principles among such partnerships draw major powers into an inclusive global framework.