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Singapore and the European Union (EU) have successfully concluded negotiations on the EU-Singapore Digital Trade Agreement (EUSDTA), a pivotal development in their digital economic partnership. The announcement was made in Brussels by Singapore’s Minister-in-charge of Trade Relations, Grace Fu, and European Commission Executive Vice President (EVP) for an Economy that Works for People and Commissioner for Trade, Valdis Dombrovskis.
The EUSDTA builds on the EU-Singapore Digital Partnership (EUSDP), established on February 1, 2023, which provided a framework for their digital economy collaboration and set the stage for the agreement. Designed to enhance clarity and legal certainty for digital trade, the EUSDTA aims to strengthen digital connectivity and interoperability between Singapore and the EU.
The agreement introduces several high-standard commitments to facilitate open and secure data flows. It prohibits data localisation requirements – meaning companies cannot be forced to store data in specific locations – and ensures the protection of personal data. The EUSDTA also addresses forced transfers of technology and intellectual property, streamlines transactions, and protects consumers from unfair practices and spam.
Minister Fu highlighted the significance of the EUSDTA, stating, “This agreement underscores our joint commitment with the EU to provide legal certainty and confidence in digital transactions amidst a rapidly evolving regulatory landscape. It will unlock greater opportunities in the digital economy and ensure digital inclusion, especially for SMEs. As the first Digital Trade Agreement between the EU and an ASEAN country, it advances regional digital connectivity.”
The EUSDTA aims to streamline various aspects of digital trade. It enables seamless cross-border data flows, supporting electronic commerce and digitally enabled activities by removing unnecessary barriers. The agreement also strengthens personal data protection, ensuring that both regions maintain robust legal frameworks to safeguard individuals’ data and provide clear compliance guidelines.
A notable feature of the EUSDTA is its support for open government data. By enhancing access to government data in digital formats, the agreement promotes economic and social development, competitiveness, and innovation, benefiting particularly SMEs by generating business and research opportunities.
The agreement also covers practical aspects of digital trade, such as electronic payments (e-payments) and electronic invoicing (e-invoicing). It supports international standards and interoperability in these areas to improve cost-effectiveness and efficiency. Additionally, it mandates that trade documents required for import, export, or transit be available electronically and accepted as legally equivalent to paper versions. The EUSDTA further stipulates that no customs duties will be imposed on electronic transmissions.
In terms of digital security, the EUSDTA aims to establish trusted and secure digital systems. It protects source code used by companies, ensuring that there are no requirements for its transfer or access as a market entry condition. The agreement also fosters collaboration on cybersecurity to identify and mitigate threats and build workforce capabilities. It enhances online consumer protection by adopting measures to guard against fraudulent and deceptive practices in electronic commerce.
Moreover, the EUSDTA focuses on increasing digital participation and inclusion. It supports SMEs by facilitating their access to digital trade opportunities and exchanging best practices on leveraging digital tools. It also emphasises the importance of digital inclusion, ensuring that all individuals and businesses can engage with and benefit from the digital economy.
Alongside the EUSDTA announcement, Minister Fu and EVP Dombrovskis co-chaired the second Trade Committee meeting under the EU-Singapore Free Trade Agreement (EUSFTA), which has been in force since November 2019. This meeting reaffirmed the strong economic relations between Singapore and the EU, discussed progress on the EUSFTA’s implementation, and explored new areas for collaboration, including the green economy.
The EUSDTA represents a significant advancement in digital trade, setting high standards for cross-border data flows and digital connectivity. It now awaits domestic approval before formal signing and conclusion, marking a new chapter in Singapore-EU relations.
