What the EU/Singapore Digital Deal Means for Data Regulation

The European Union (EU) and Singapore are agreeing a trade deal to simplify cross-border data flows.

The Digital Trade Agreement builds upon existing EU-Singapore free trade accords from 2019 and aims to set rules governing e-signatures and consumer protection. It will set fair digital trade rules that are designed to uphold open digital economies that are competitive and transparent.

Designed to increase online commerce between both parties, the agreement also aims to reduce paperwork and costs for small and medium-sized enterprises (SMEs) so they can participate in digital trade more easily. 

The hope is that the agreement will build greater trust in digital commerce and offer businesses clear guidelines on how data can be shared.

Building stronger digital trade relationships

The EU and Singapore both hold a long-standing commitment to economic relations, which is supported by their 2019 Free Trade Agreement. Designed to shape global rules for data, the agreement aims to deepen their digital partnership and highlight the EU and Singapore’s commitment to a high standard of digital trade regulations.

It also aims to build upon this existing relationship and further solidify economic ties between the EU and Singapore.

The agreement is also part of the EU’s ambition to agree on up-to-date digital trade rules with its global partners, the European Commission said. It already holds cross-border data flow agreements with Japan, in addition to Free Trade Agreements with the UK, Chile and New Zealand.

Currently, the EU is a world-leading importer and exporter of digitally deliverable services, with 55% of total EU trade in services being delivered digitally in 2022.

With Singapore, more than half of total trade services with the EU are already digitally delivered. It is the hope that this new agreement will boost these existing connections and offer increased growth opportunities.

“The Digital Trade Agreement sets digital trade rules and facilitates cross border data flows between the EU and Singapore,” the European Commission says on the partnership. “It also demonstrates our shared objective to uphold open digital economies that are competitive, transparent, and fair. 

“The Agreement will contribute to our societies' digital transformation that enables our companies and people to keep pace with the fast-evolving nature of the digital economy, as well as access and benefit from greater opportunities.”

Investing in global business

For the EU, the Digital Trade Agreement reflects its aspiration to be a global standard-setter for digital trade, with a particular focus on the Asia-Pacific (APAC).

By connecting both economies further, it aims to benefit businesses and consumers that want to engage in digital trade.

“Building smart, modern rules for digital trade with our global partners is crucial at a time when more than half of EU trade in services is delivered digitally,” comments Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade at the European Commission.

He adds: “This deal will benefit businesses and consumers on both sides, bringing our economies closer together, while representing a significant step forward for the EU’s ambition to be a global standard-setter in the domain of digital trade.”

The agreement also seeks to provide binding rules that build consumer trust, ensure predictability and legal certainty for businesses, in addition to removing and preventing the emergence of unjustified barriers to digital trade. This stands to unlock new economic opportunities while ensuring a safe online environment. 

An agreement of this scale inevitably ensures the EU and Singapore can develop and implement the required policies to address new digital challenges in the current business landscape. The new digital data rules are designed to protect people and their rights across the commerce sector.

Deal negotiations have ended and now both parties will work towards formalising the agreement.

The European Commission has been busy in the digital world in 2024, having formalised its pioneering regulations on AI. 

The EU AI Act has now been published into law and is designed to help businesses and world leaders harness the power of digital transformation responsibly with AI guidelines.

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