Singapore, European Union sign new trade agreement to boost digital connectivity

Singapore and the European Union (EU) have signed a new agreement to facilitate end-to-end digital trade between them.

When implemented, the European Union-Singapore Digital Trade Agreement (EUSDTA) will lay down rules for digital trade and cross-border data flows, such as the transfer of information internationally.

The agreement was inked in Singapore on Wednesday (7 May) by Minister-in-charge of Trade Relations Grace Fu and EU Commissioner for Trade and Economic Security Maros Sefcovic.

In a statement, Singapore’s Ministry of Trade and Industry said the EUSDTA will “provide greater clarity and legal certainty” for individuals and businesses. It will also enhance EU-Singapore relations by strengthening bilateral economic connectivity.

With this being the EU’s first bilateral digital-economy deal with an ASEAN member state, Fu said the EUSDTA will also support greater region-to-region digital connectivity.

“(It) reflects our shared commitment to foster a trusted, secure, and inclusive digital economy, and create new opportunities for our companies and citizens in digital trade,” she said.
 

The MTI statement noted that the EU is Singapore’s fifth-largest goods trading partner. Last year, bilateral trade in goods shot past S$100 billion, which represented 7.8 per cent of Singapore’s total goods trade.

The EU is also Singapore’s second-largest services trading partner, with bilateral trade in services amounting to more than S$110 billion in 2023. The EU is Singapore’s second-largest foreign investor and second-largest overseas investment destination.

New growth opportunities

One key feature of the EUSDTA is the enabling and facilitating of open and secure data flows. To support trusted cross-border data flows for e-commerce and other activities, Singapore and the EU will commit to allow businesses to transfer data, including requirements to store data in specific locations.

On personal data protection, Singapore and the EU have agreed to maintain a legal framework to protect the personal data of individuals. Both sides will also publish information on the personal data protection measures that their respective jurisdictions provide to individuals.

Secondly, the EUSDTA supports the development of cross-border e-payments and e-invoicing, adopting the use of internationally accepted standards to promote interoperability.

This includes the adoption of paperless trading for legal documents and free trade on electronic transmissions without customs duties. On cybersecurity, Singapore and the EU will collaborate to identify and mitigate threats to enhance consumer protection, such as by protecting source code – software containing intellectual property and sensitive information – used in companies.

As for small and medium-sized enterprises (SMEs), they can look forward to improved public access to government data digitally through the agreement, generating business and research opportunities.

SMEs will also receive support from the EUSDTA to enhance their digital tools and technology to enhance bilateral trade, investment and participation in the digital economy for opportunities.

Singapore Business Federation chief executive officer Kok Ping Soon said: “We believe the EUSDTA, which builds on the EUSFTA (EU-Singapore Free Trade Agreement), will open up new avenues of growth by streamlining digital transactions, improving regulatory transparency, and promoting a secure digital environment."

EuroCham (Singapore) executive director Nele Cornelis said: “The EUSDTA creates a framework for deeper cooperation on digital trade, cross-border data flows and technology standards – supporting both innovation and supply chain resilience.”
 

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