Singapore, EU sign pact to boost connectivity between their digital markets

Singapore and the European Union have signed an agreement that will lead to a digital trade pact to enable consumers and businesses to transact online more seamlessly and at lower costs.

The EU-Singapore Digital Partnership (EUSDP) inked in Brussels on Wednesday aims to boost participation in the digital economy by imparting relevant skills to workers in both jurisdictions and transforming their businesses and public services, said the Ministry of Trade and Industry (MTI).

Other areas of collaboration include digital trade facilitation, trusted data flows, electronic payments and standards. The deal will also focus on emerging areas such as artificial intelligence, digital identities, and 5G/6G communication networks.
 

The EUSDP was signed by Singapore's Minister-in-charge of Trade Relations S. Iswaran and Mr Thierry Breton, European Commissioner for the Internal Market.

The signing follows the announcement late in 2022 that negotiations on the agreement had largely been completed.

Mr Iswaran said: “The EUSDP strengthens connectivity and interoperability between the digital markets of the EU and Singapore.”

As a first step towards a bilateral digital trade agreement, a set of Digital Trade Principles was also agreed upon on Wednesday.

These are designed to provide a common framework for digital strategies, which will, in turn, contribute to the ongoing global discussions on establishing rules regarding electronic commerce.

The yet-to-be-signed digital trade agreement will facilitate cross-border data flows, enable cost savings via the use of electronic trade documentation and authentication, and ensure that consumers enjoy greater online consumer protection when purchasing goods and services online.

Mr Iswaran, in a video call with the Singapore media from Brussels, said: “There is a clear desire on the part of all parties to commence the negotiations... as early as possible this year.”

Singapore and the EU are already major trading partners. Their EU-Singapore Free Trade Agreement entered into force in November 2019.

MTI said the EU is Singapore's fourth-largest goods trade partner globally. In 2021, bilateral trade in goods was $102 billion, representing 8.8 per cent of Singapore's total goods trade.

The EU is also Singapore's second-largest services trade partner globally, with bilateral trade in services exceeding $67 billion, and Singapore's second-largest foreign investor.

Digital economy and partnership agreements are Singapore's way of building on its extensive network of free trade agreements and digital cooperation initiatives. They also complement the nation's role at the World Trade Organisation as co-convener, together with Australia and Japan, of the Joint Statement Initiative on e-commerce.
 

Such pacts have become imperative as digitalisation and technological disruptions transform consumer behaviours and business models, while at the same time creating new opportunities.

Businesses are also increasingly reliant on electronic transactions and digital solutions, from sourcing to invoicing to payments. Secure and seamless cross-border data flows have become essential to the growth of the economy and to ensure that consumer interests are safeguarded.

The digitalisation of trade has also brought greater attention to regulations. Fragmented rules on data protection have led to varying restrictions for personal information transfer and increased compliance costs.

Singapore digital agreements aim to address these challenges so that businesses, including small and medium-sized enterprises (SMEs), can more easily connect with partners overseas.

The goals of these agreements are ultimately to lower operating costs, increase efficiency, and create easier access to overseas markets.

Mr Iswaran said adapting to the digital transition is challenging for both the workforce and businesses, especially SMEs.

“And that is where we really need to work on... in terms of efforts to upskill the workforce and on how we enable our SMEs to adapt to these new possibilities so that they can benefit from them,” he said.

The minister added that digital agreements such as the EUSDP will help Singapore reinforce its role as a global business hub, and increasingly also as a digital hub where data flows and analytics can be applied to the region and beyond.

“It is the kind of knowledge-intensive, technology-intensive and data-intensive activity that we are seeking to build into another pillar in our economy,” he said.

Singapore has concluded negotiations on digital economy agreements with Chile, New Zealand, Australia, Britain and South Korea.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.