On 25 July 2024, the European Union (EU) and Singapore concluded negotiations for a landmark Digital Trade Agreement (DTA), the first of its kind for the EU. The EU-Singapore Digital Trade Agreement (EUSDTA) agreement complements the 2019 EU-Singapore Free Trade Agreement (FTA) and aims to set global standards for digital trade and cross-border data flows.
Key elements of the agreement
- Facilitating digital trade: The EUSDTA aims to enhance digitally enabled trade in goods and services between the EU and Singapore. It includes provisions to ensure the free flow of data across borders, remove unjustified barriers to digital trade, and establish binding rules to build trust and ensure legal certainty for businesses.
- Boosting economic opportunities: The agreement could unlock new economic opportunities by promoting an open, fair, and competitive digital economy. This will benefit both businesses and consumers by providing a predictable and secure online environment.
- Enhancing consumer trust: Strong rules on spam and other digital trade practices would enhance consumer trust, ensuring that digital interactions remain secure and reliable.
- Policy development and cooperation: The EUSDTA underscores the strategic importance of digital trade and the EU’s role as a global standard-setter. It promotes cooperation in regulatory approaches, including in fields like artificial intelligence (AI) and electronic identification (eID), as well as investments in resilient and sustainable digital infrastructures.
EU POV and strategic importance
The EUSDTA is a significant step in the EU’s ambition to agree on up-to-date digital trade rules with global partners, reflecting its commitment to shaping the digital future with a human-centric and sustainable approach.
This agreement follows similar digital partnerships with Japan[1] and South Korea,[2] solidifying the EU’s position in the Indo-Pacific region. In 2022, trade in digitally deliverable services accounted for more than 55% of total EU-Singapore trade in services, valued at EUR 43 billion.
The EUSDTA could further boost this trade connection and provide more opportunities for growth, especially for micro, small, and medium-sized enterprises (MSMEs).
Singapore POV and strategic importance
From the Singapore perspective, the EUSDTA is expected to provide and strengthen legal certainty for international businesses and consumers in both countries, as well as improve digital interconnectivity and interoperability between the two markets.
When the EUSDTA is fully concluded, it will join four other Digital Economy Agreements with other markets:
- Digital Economy Partnership Agreement (DEPA): This agreement with Chile and New Zealand entered into force for Singapore and New Zealand on 7 January 2021 and for Chile on 23 November 2021.
- Singapore-Australia Digital Economy Agreement (SADEA): This entered into force on 8 December 2020.
- United Kingdom-Singapore Digital Economy Agreement (UKSDEA): This entered into force on 14 June 2022.
- Korea-Singapore Digital Partnership Agreement (KSDPA): This entered into force on 14 January 2023)
Next steps: Moving towards EUSDTA formal agreement and signing
Following the political conclusion of the negotiations, the EU and Singapore will proceed with their respective domestic approval processes to work towards the formal signature and conclusion of the agreement.
The EU-Singapore Digital Trade Agreement marks a pivotal moment in the evolution of digital trade relations. It sets a precedent for future agreements, fostering a robust, secure, and fair digital economy. Businesses engaging in digital trade between the EU and Singapore can anticipate a more predictable and legally certain environment, facilitating greater economic cooperation and growth.
Access Partnership helps businesses navigate complex regulatory challenges to deploy and optimise their technologies. To navigate and capitalise on these developments in EU and Singapore digital policy, please contact Mark Smitham at [email protected] or Lim May-Ann at [email protected].
