EU-Singapore Digital Trade Agreement to secure data flows and access to digital opportunities

From digital government data access to mitigating cybersecurity threats, Singapore and the European Union (EU) will collaborate under the EU-Singapore Digital Trade Agreement (EUSDTA) to unlock new opportunities in the digital economy. 

The Singapore Minister-in-charge of Trade Relations, Grace Fu, and the EU Commissioner for Trade and Economic Security, Maroš Šefčovič, signed the agreement on May 7, underscoring the importance of the digital economy. 

More than half of the total trade in services between Singapore and the EU in 2022, worth over S$60 billion, were delivered digitally. 
 
“Digital trade is no longer a niche. It’s essential to global commerce and a powerful engine of economic growth. 

“Today, it [digital trade] represents 25 per cent of international trade and is expanding much faster than traditional trade flows,” said Commissioner Šefčovič. 

The EUSDTA aimed to enhance digital connectivity and facilitate end-to-end digital trade between the EU and Singapore. 

Negotiations on the agreement began as early as 2023, where the two sides sought to build on its existing free trade agreement to extend the partnership into the digital domain.   

Minister Fu highlighted the shared commitment of fostering a “trusted, secure, and inclusive digital economy” for its companies and citizens in digital trade amid uncertain and challenging times. 
 
“As the EU’s first bilateral digital economy agreement with an ASEAN country, the EUSDTA will also support greater region-to-region digital connectivity,” she said.  

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What it means 

The agreement spells out four main features to enhance digital connectivity between the EU and Singapore, and to facilitate end-to-end trade by establishing rules and standards for digital trade and cross-border data flows. 

First on data flows, both jurisdictions have committed to allowing businesses to transfer data, including requirements to store data in specified locations.

Singapore and the EU will also publish information on personal data protection measures and respective jurisdictions around compliance and remediation.  

Small and medium-sized enterprises (SMEs) in both regions are encouraged to tap on open government data, where both authorities will cooperate to create new business opportunities. 

Second for digital trade, the EUSDTA will foster the adoption of internationally accepted cross-border e-payment standards, promoting interoperability between the regions.  

The agreement will also drive implementation of e-invoicing and electronic trade documents. Additionally, Singapore and the EU will not impose customs duties on electronic transmissions. 

Third, to establish secure and trusted digital systems, Singapore and the EU will not require the transfer of or access to source code as a condition of market access.  

Authorities from both regions will also collaborate to identify and mitigate cybersecurity threats.  

Moreover, Singapore and the EU will adopt measures for online consumer protection against fraudulent activities that cause harm to consumers engaged in electronic commerce. 

Lastly, the EUSDTA will promote greater participation and access to opportunities in the digital economy.  

The two regions will cooperate to exchange information and best practices for SMEs to leverage digital tools and technology for digital trade. Cooperation efforts will also extend toward enhancing digital inclusion for all people and businesses. 

Why does it matter 

The EU is Singapore’s fifth largest goods trading partner. Bilateral trade in goods reached over S$100 billion in 2024, representing 7.8 per cent of Singapore’s total goods trade. 

Singapore Business Federation’s CEO, Kok Ping Soon, commented that the EUSDTA will strengthen Singapore’s position as a leading digital hub. 

“The EUSFTA, which eliminates all tariffs on goods into EU, was among the top three most utilised FTA (Free Trade Agreements) among Singapore businesses in 2023,” he said 

In March, the Acting Commissioner of Singapore’s Personal Data Protection Commission (PDPC), Denise Wong, and the European Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, Michael McGrath, both sides agreed to further develop their partnership on issues of data protection and trusted data flows.   

When implemented, the EUSDTA will provide greater clarity and legal certainty for citizens and businesses by putting in place rules for digital trade and cross-border data flows.