Singapore and the EU conclude negotiations on European Union-Singapore Digital Trade Agreement (EUSDTA)

27 August 2024

On 25 July 2024, the 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 jointly announced the conclusion of negotiations on the European Union-Singapore Digital Trade Agreement (“EUSDTA”) in Brussels, Belgium.

The EUSDTA builds on the European Union-Singapore Digital Partnership (“EUSDP”), an overarching framework for all bilateral digital economy cooperation which was signed on 1 February 2023, and the Digital Trade Principles which outline the scope of a possible digital trade agreement and marked the first step toward the EUSDTA. More information on the EUSDP is set out in our article “Singapore and the EU sign Digital Partnership”.

The EUSDTA will provide clarity and legal certainty for companies and consumers on the rules for digital trade between Singapore and the EU, and strengthen digital connectivity and interoperability between their digital markets.

Minister Fu and EVP Dombrovskis also convened the second Trade Committee meeting under the European Union-Singapore Free Trade Agreement (“EUSFTA”), which entered into force in November 2019. Minister Fu and EVP Dombrovskis affirmed the good cooperation between Singapore and the EU on the EUSFTA’s smooth implementation and effective functioning, discussed ways to deepen collaboration in forward-looking trade areas including the green economy, and exchanged views on regional and global economic developments. More information on the EUSFTA is set out in our article “European Union-Singapore Free Trade Agreement in force from 21 November 2019”.

The EUSDTA comprises high-standard commitments that will enable open and secure data flows, facilitate end-to-end digital trade, and establish trusted and secure digital systems for businesses and consumers. Key aspects of the EUSDTA, which will be put in place by legally binding rules, are set out below.

Enabling and facilitating open and secure data flows

The EUSDTA enables and facilitates open and secure data flows in the following ways:

  • Supporting trusted cross-border data flows: To support trusted cross-border data flows for electronic commerce and other digitally enabled activities, Singapore and the EU committed to allow businesses to transfer data seamlessly across each other’s territories, and to prohibit requirements to store data in specified locations. This will remove unnecessary barriers to digital trade.
  • Personal data protection: Singapore and the EU agreed to maintain a legal framework to protect the personal data of individuals, based on principles and guidelines developed by relevant international bodies. Singapore and the EU will also publish information on personal data protection measures it provides to individuals, including on how individuals can pursue remedies and how businesses can comply with legal requirements.
  • Open government data: To encourage the use of publicly available government data, especially for small and medium-sized enterprises (“SMEs”), Singapore and the EU will cooperate to enhance and generate business and research opportunities.

Facilitating end-to-end digital trade

The EUSDTA aims to facilitate end-to-end digital trade through the following means:

  • Support development of cross-border electronic payments (“e-payments”): The EUSDTA recognises the benefits of supporting the development of cross-border e-payments. Singapore and the EU will foster the adoption and use of internationally accepted standards, promote interoperability, and encourage innovation and competition in payment services.
  • Implement measures for electronic invoicing (“e-invoicing”): To drive cost-effectiveness, efficiency, accuracy, and reliability of digital trade, Singapore and the EU will ensure that the implementation of measures related to e-invoicing is designed to support cross-border interoperability between the e-invoicing frameworks of both sides.
  • Accept paperless trading: Singapore and the EU will make available trade documents required for import, export, or transit of goods in electronic format and accept electronic versions of these documents as the legal equivalent of paper versions.
  • No customs duties: Singapore and the EU will not impose customs duties on electronic transmissions.

Establishing trusted and secure digital systems 

To establish trusted and secure digital systems, the Singapore and the EU will take the following measures under the EUSDTA: 

  • No requirement to transfer/access source code: Singapore and the EU will not require the transfer of or access to source code as a condition of market access given the importance of fostering trust in the markets within which software developers operate, encouraging innovation, and ensuring that source code used by companies are protected.
  • Collaborate on cybersecurity: In recognition of the evolving nature of threats to cybersecurity, Singapore and the EU will collaborate to identify and mitigate these threats, as well as build the capabilities of the workforce in both jurisdictions.
  • Enhance consumer protection: To enhance consumer protection, Singapore and the EU will adopt or maintain measures that guard against fraudulent, misleading, or deceptive commercial activities that cause harm to consumers engaged in electronic commerce.

Promote greater participation and access to opportunities in digital economy for companies and people 

Singapore and the EU will cooperate to exchange information and best practices in leveraging digital tools and technology to enhance SME participation in digital trade opportunities. The parties will also cooperate to enhance digital inclusion, including through exchanges of information and best practices, and addressing barriers to accessing digital trade opportunities.

Reference materials

The press release on this development is available on the Ministry of Trade and Industry website www.mti.gov.sg.