The UK has struck an agreement in principle with Singapore on trade – the first digitally focused trade agreement ever signed by a European nation.
The Digital Economy Agreement (DEA), announced today after six months of negotiations, is the third such agreement struck by Singapore and covers trade in goods and services.
‘Overhaul outdated trade rules’
In a statement today (Thursday 9 December), the Department for International Trade said the agreement would “overhaul outdated trade rules that affect both goods and services exporters…taking our trading relationship – worth £16 billion in 2020 – to the next level”.
Observers note the agreement is a milestone in the progress of trade digitalisation – which has accelerated during the pandemic – and demonstrates how trade procedures need to digitise to the World Trade Organization.
The deal would “slash red tape, cut costs and support well-paid jobs across the whole UK," international trade minister Anne-Marie Trevelyan said, after agreeing the DEA with international Singapore’s minister-in-charge of trade relations, S. Iswaran.
‘Service exporters are big winners’
The DEA would make it “easier for UK businesses to target new opportunities in Singapore and other lucrative Asian markets,” DIT said in a statement.
A third of UK exports to Singapore are already digitally delivered, including in finance, advertising and engineering.
“This deal will create new opportunities to expand digital trade,” DIT said. “Services companies will be the big winners, from financial and telecoms giants like Standard Chartered or BT Group to software companies like Wales-based Awen Collective.”
- promises to further enable digital trade between the two countries through e-payments and e-documentation
- promotes data flows and prohibits localisation
- guarantees rights to protect data (through cryptography and protecting source codes)
- protects online consumers rights
IOE&IT director general Marco Forgione said: “This is good news for UK businesses looking to trade with Singapore.
“Digital technology is playing an ever bigger role in trade – both in facilitation and as part of the mix of products and services themselves.
“This deal is progress on both those fronts, with a commitment to make digital, paperless, trade between the two countries a reality, and measures that will enable companies to offer their customers and partners better, digital services.
“Digital services are a huge part of the UK’s trade picture, accounting for £207bn of exports in 2019, but the benefits of digitalisation will be felt across the whole range of sectors as services and goods become increasingly linked.”
Singapore, with its long history as an Asian trading hub, has reinvented itself as a world leader in electronics, manufacturing, digital services, energy, chemicals and financial services.
Located where major East and West shipping lanes converge, Singapore’s ambitious new Tuas Mega Port will be the world’s largest container terminal when it is finished, with the first of four phases soon to open.
Singapore became part of Malaysia in 1963, ending nearly 150 years of British rule on the island, and then an independent republic in August 1965.