On 7 May 2025, the EU and Singapore took a step forward by signing a landmark Digital Trade Agreement (“DTA”). The DTA is a self-standing agreement – meaning it is separate to the EU-Singapore Free Trade Agreement and the EU-Singapore Investment Protection Agreement. This comprehensive agreement goes beyond traditional trade deals, focusing specifically on facilitating digital trade and addressing emerging challenges in the digital economy. Upon implementation, the DTA should bolster consumer confidence, guarantee reliable data flows, and offer enhanced predictability and legal clarity for businesses of all sizes trading by economic means. The full text of the DTA can be found here.
The DTA’s key provisions include:
- The prohibition of customs duties on electronic transmissions: The purpose of the DTA is to dismantle unjustified obstacles to digital trade. Therefore, the DTA prohibits the parties imposing customs duties on electronic transmissions between each other. Although the WTO members already have agreed to not impose customs duties on electronic transmissions (also known as the “WTO e-commerce customs duty moratorium”), this agreement faces scrutiny. The current practice of not imposing customs duties on electronic commission is set to continue until either 31 March 2026 or the 14th Session of the WTO Ministerial Conference, whichever is earlier. The WTO e-commerce moratorium will expire on that date and its renewal is not guaranteed.
- The elimination of other unjustified barriers to digital trade: The DTA aims to remove unnecessary obstacles to the provision of digital services and the trade of digital products. This includes commitments regarding electronic signatures, electronic invoicing, electronic payments and online consumer protection (i.e. combatting misleading, fraudulent and deceptive commercial activities). The DTA promotes paperless trading, meaning that the parties recognize the importance of eliminating paper forms and documents required for import, export or transit of goods.
- The facilitation of cross-border data flows: The DTA establishes rules to ensure the cross-border transfer of data by electronic means. To that end, the parties have agreed not to adopt or maintain measures which prohibit or restrict the cross-border transfer of data (e.g. data localization requirements and prohibitions to transfer or store data) to the other party. The free flow of data is crucial for businesses relying on cloud computing, data analytics, and other data-driven services.
- The protection of personal data: In the DTA, the parties have agreed to adopt or maintain a legal framework which provides for the protection of personal data of individuals, recognizing that individuals have a right to privacy and the protection of personal data, and that high and enforceable standards in this regard contribute to trust in the digital economy and to the development of trade.
The DTA is the first of its kind and will serve as a blueprint for future digital trade agreements. It underscores the growing importance of the digital economy in global commerce.
The signed DTA will now proceed through the ratification processes of both the EU and Singapore. In the EU, this necessitates obtaining the European Parliament’s formal approval.
