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Article European Union–Singapore: Landmark Digital Trade Agreement Concluded

On July 25, 2024, the European Union (EU) and Singapore concluded a Digital Trade Agreement (DTA) after five rounds of discussions. The new agreement seeks to improve cross-border digital trade, fortify cooperation in the digital economy, and set a global benchmark for future digital agreements.

It will enter into force two months after both parties complete their legal requirements. (DTA art. 38.) The EU’s requirements include approval by the Council of the EU and publication in the EU’s Official Journal. (Treaty on the Functioning of the European Union, arts. 218, 297.)

A digital trade agreement facilitates and regulates trade in the digital economy by addressing issues related to the cross-border flow of data, e-commerce, and the use of digital technologies in trade, creating a more predictable and open environment for digital transactions.

Background

The DTA complements the existing EU-Singapore Free Trade and Investment Protection Agreement (EUSFTA). (DTA art. 1.) The DTA extends a prior agreement between the parties on digital trade, the EU-Singapore Digital Partnership, entered into force in 2023 pursuant to the EUSFTA, which includes a set of norms called the Digital Partnership Principles that preliminarily addressed topics later covered by the DTA. More broadly, the DTA aligns with the EU’s Indo-Pacific Strategy, which focuses on sustainable prosperity, green transition, ocean governance, digital partnerships, connectivity, security, and human security.

Key Provisions

The EU-Singapore DTA is designed to streamline cross-border data flows, strengthen e-commerce regulations, and ensure data privacy. (Arts. 5, 6.) The parties agree not to require data to be stored or processed only within their own territory, not to ban storing or processing data in the other party’s territory, and not to block data from being transferred into their territory. (Art. 5.) They also agree to recognize the legal validity of electronic signatures. (Art. 10). The agreement establishes measures for online customer safety, including requirements for transparency on products and vendors and adopting consumer protection laws and regulations. (Art. 12.)

Focus Areas for Development

Initial actions under the agreement focus on advancing paperless trading and electronic invoicing, and strengthening digital infrastructure security. The parties agree to enhance cybersecurity through shared standards and to address illegal online content.

The DTA encourages digital trade by requiring the exchange information on regulatory issues, facilitating end-user access to the internet, and use of electronic invoices. (Art. 14, para. 2; art. 15; art. 17, para. 1.) The DTA incorporates principles and guidelines developed by relevant international bodies, such as the OECD Guideline Governing the Protection of Privacy and Transborder Flows of Personal Data, to prevent fraudulent activities and ensure data privacy and protection. (Art. 6, para. 1.) The DTA also addresses the governance and regulation of online platforms by striving to improve the interoperability of digital trust services and preventing misleading, fraudulent and deceptive commercial activities. (Art. 12.)

Another focus of the DTA is trustworthy AI cooperation, including developing governance frameworks and enhancing interoperability, with potential future agreements formalizing mutual recognition arrangements. (Art. 14, para. 1.)

In the financial sector, the agreement promotes collaboration on digital finance, such as online banking and online payment systems, to harness opportunities and manage associated risks. For example, the DTA aims to make cross-border electronic payments more secure and accessible by encouraging financial services to use open platforms and to share their technology to make it easier for different systems to work together. (Art. 21, para. 2.b.)

Support for small and medium-sized enterprises is emphasized, with initiatives geared toward facilitating their participation in digital trade through the exchange of information on best practices in leveraging digital tools and new technology. (Art. 24, para. 3.)

Additionally, the agreement promotes education and inclusion by encouraging accessible digital education and sharing best practices and content. (Art. 25 paras. 1, 2.a.)

Regarding the standards and requirements set by the Digital Services Act of the EU and the Digital Service Standards of Singapore, the DTA calls for mutual recognition to ensure compatibility and interoperability across digital platforms. (Art. 23.) It also emphasizes enhancing information exchange and collaboration on cybersecurity, aiming to foster transparency in these efforts. (Art. 22.)

Prepared by Ivana Hristova, Law Library Intern, under the supervision of Jenny W. Gesley, Foreign Law Specialist

Law Library of Congress, October 2, 2024

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Chicago citation style:

Gesley, Jenny. European Union–Singapore: Landmark Digital Trade Agreement Concluded. 2024. Web Page. https://www.loc.gov/item/global-legal-monitor/2024-10-02/european-union-singapore-landmark-digital-trade-agreement-concluded/.

APA citation style:

Gesley, J. (2024) European Union–Singapore: Landmark Digital Trade Agreement Concluded. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2024-10-02/european-union-singapore-landmark-digital-trade-agreement-concluded/.

MLA citation style:

Gesley, Jenny. European Union–Singapore: Landmark Digital Trade Agreement Concluded. 2024. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2024-10-02/european-union-singapore-landmark-digital-trade-agreement-concluded/>.