Monday, February 6, 2023

Singapore and South Korea Sign Digital Trade Agreement

Singapore signed a digital trade agreement with South Korea in November 2022 under the Korea-Singapore Digital Partnership Agreement (KSDPA); making it the fourth of its kind signed by the city-state.

The agreement seeks to establish forward-looking digital trade rules and promote interoperability between digital systems. This will hopefully encourage more seamless cross-border data flows and build a trustworthy digital environment for businesses.

In November 2022, Singapore signed a digital agreement with South Korea under the Korea-Singapore Digital Partnership Agreement (KSDPA). This is the fourth Digital Economy Agreement (DEA) Singapore has signed and the first with an Asian country.

The country first signed a DEPA in 2020 with New Zealand and Chile, which came into effect in 2021. The DEPA was the world’s first ‘digital only’ trade agreement with the aim to establish digital trade rules and digital economy collaborations. Singapore has signed other DEPAs with Australia and the UK.

This represents an important new form of economic engagement, particularly at a time when most business activities were forced to go online because of the COVID-19 pandemic and have continued to do so post-COVID.

South Korea was Singapore’s seventh largest trade partner in 2021 with merchandise trade amounting to US$40.93 billion, an increase of 26 percent from 2020.

What are the key features of the KSDPA?

e-payments

Singapore and South Korea will facilitate secure e-payment systems by encouraging the use of Application Programming Interfaces (API).

Paperless trading

The KSDPA will see Singapore and South Korea accept electronic versions of trade administration documents for efficient cross-border supply chain digitalization.

Cross-border data flows

Through the KSDPA, businesses can transfer information seamlessly, including those held or generated by financial institutions.

Prohibiting data localization

The agreement aims to establish rules against data localization requirements so that businesses in Singapore and South Korea can choose where their data is stored and processed, and which cloud technology to use.

Artificial intelligence

Singapore and South Korea will identify opportunities to collaborate on artificial intelligence ethics and governance.

SME cooperation

The digital trade agreement seeks to promote growth for small and medium-sized businesses by helping them to connect with international suppliers, buyers, and other potential business partners.

Digital identities

Both countries will cooperate to promote interoperability between their respective digital identity regimes. This can bring benefits such as the faster processing of applications, and easier access to services for individuals and businesses.

Cryptography

The KSDPA hopes to remove the access and transfer of private keys and related technologies as a condition of market access. In turn, businesses have greater trust in the market within which they operate and encourage innovation.

Source code protection

Source codes used by Singaporean and South Korean businesses will be protected and neither country will require the transfer of access to a company’s source code as a condition of market access.

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