Singapore, South Korea agree on first digital trade deal between two Asian nations, Economy News & Top Stories

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SINGAPORE – Singapore and South Korea agreed on a new pact that will set rules and standards for digital trade and partnership between the two countries.

Korea’s Minister for Trade Mr Yeo Han-Koo and Singapore’s Second Minister for Trade and Industry Dr Tan See Leng announced the conclusion of talks on the Korea-Singapore Digital Partnership Agreement (KSDPA) after a meeting here on Wednesday (Dec 15).

The KSDPA will be Singapore’s fourth digital economy agreement (DEA), and the first with an Asian country.

The new rules and norms will allow digital infrastructure in both the countries to exchange information and data and build a trusted and secure digital environment for businesses and consumers, said a statement issued by MTI.

Mr Yeo, in a virtual interview with The Straits Times, said the agreement will increase the access of consumers in Singapore to South Korean products via e-commerce platforms such as Shopee and Lazada.

They will also be able to access online entertainment content such as Korean dramas, movies and Kpop performances on online platforms other than those currently available, such as Netflix.

“Korea and Singapore have always been like-minded partners in trade and investment. This agreement further solidifies our partnership on digital trade rules.

“Also, Singapore is at the core of Asean and a leading digital hub, making it likely for Korean firms to expand into the region in the digital sector utilising the KSDPA, ” he said.

The KSDPA will prohibit data localisation – that requires data to be stored inside a country – except for specific purposes such as regulatory access.

According to the statement, the delocalisation will allow businesses to transfer data securely as part of their daily business operations and choose where they may wish to store and process their data, according to their business needs.

Dr Tan in the MTI statement said; “By aligning standards, enabling trusted data flows and allowing cross border digital transactions to take place more seamlessly, the KSDPA will open up opportunities for our businesses and people in the rapidly growing digital economy.”

The agreement will deepen bilateral cooperation between the two countries in new emerging areas like personal information protection, e-payments, and source code protection.

Source code refers to any collection of codes, with or without comments, written using a human-readable programming language, usually as plain text. It serves the needs of companies who have procedures in place that they want to retain regardless of the software installed.

South Korea and Singapore will also identify cross-border opportunities to facilitate Artificial Intelligence innovation and collaborations, the MTI statement said.

The KSDPA will also complement Singapore’s efforts to develop global rules as co-convenor of the World Trade Organisation joint initiative on e-commerce. The other two co-convenors of the initiative are Australia andJapan.

According to MTI, Singapore was South Korea’s 8th largest trade partner in 2020, with bilateral trade reaching S$44.6 billion. As of end-2019, Singapore has invested about S$8.37 billion in Korea, and has received a cumulative direct investment of S$23.7 billion from the North Asian nation.

The KSDPA follows the Digital Economy Partnership Agreement with Chile and New Zealand, the Singapore-Australia DEA, and the UK-Singapore DEA that was agreed on December 9.

The DEAs with UK and Korea are likely to come into force sometime next year.