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EU and Singapore to prepare the ground for digital partnership talks

The EU and Singapore will soon formally start preparing the ground to start negotiations towards a digital partnership agreement.

These ‘scoping’ talks will be held  within the framework of an already existing two-year-old bilateral free trade agreement and form part of a dedicated working group under the deal’s Joint Committee.

Launching a digital partnership with Singapore “is important for the EU in light of the digital transformation of our economies, also for trade, namely to agree on digital rules bilaterally and align our approach to the e-commerce negotiations in the World Trade Organization,” said European Commission executive vice-president Valdis Dombrovskis.

The EU recently launched a new Indo-Pacific strategy. “The EU views Singapore as a key partner in making this strategy a success,” said Valdis Dombrovskis. As part of this strategy the EU is also envisaging ‘digital partnerships’ with selected countries such as Singapore.

Launching digital negotiations with the EU has been a long-standing ambition of Singapore, whose minister in charge of trade S Iswaran was in Brussels on Tuesday (7 December 2021) as part of the first joint committee meeting held under the FTA.

“We are keen on deepening Singapore’s collaboration with the EU in new growth areas such as in the digital economy. We are very pleased to be able to announce the start of talks on strengthening bilateral digital economy cooperation with the EU with a view to a comprehensive EU Singapore digital partnership,” said Iswaran.

Divergent expectations

Singapore has pioneered a series of Digital Economic Partnerships in the Asia-Pacific, which partly include already envisaged topic areas or legal language in the ongoing negotiations on e-commerce among a large subset of WTO members.

Brussels’ initial idea on such digital partnerships however is to work on other areas of digital policy which are not so far on Singapore’s international radar, such as technical standardisation, regulatory frameworks in areas such as artificial intelligence or platform regulation, supply chain resilience, and semiconductors, among others.

The EU is also saying that it would want to prioritise concluding e-commerce negotiations in the WTO whilst also promoting its own digital trade chapters within its own bilateral FTAs.

These chapters happen to include a very specific EU approach to cross-data flows in particular, where the clauses prohibit data localisation requirements but leave a lot of leeway for data privacy measures leading to restrictions on the flow of data across borders.

The EU idea is to also flank these bilateral data flow rules with data privacy framework adequacy decisions with individual countries, for which Singapore is also seen as a potential candidate.

The EU’s unilateral decision to recognise a country’s data privacy governance framework as equivalent to the EU’s makes it politically and legally easier to organise cross-border data flows and to sign on to somewhat more liberal cross-border data flow rules in its FTAs – as witnessed recently in the EU-UK Trade and Cooperation Agreement.

Singapore for its part, like other CPTPP members in the Asia-Pacific, is attuned to a more trade liberal model of trade disciplines for data flows. It also has established precedents in pursuing digital-only Digital Economy Partnership Agreements such as with New Zealand and Chile.

The EU and Singapore have not yet found full convergence on the scope of what they want to achieve. The EU itself has not settled internally on what kind of digital partnerships it will ultimately want to offer to targeted partners, which also include Japan and South Korea.

This lack of clarity at this stage also makes it difficult to determine what a potential digital partnership agreement would look like. This could be a stand-alone deal, a broader political or institutionalised partnership and/or a dedicated new FTA chapter with specific digital trade rules.

“What form it takes will be a function of what are the needs, the circumstances and also the context of the different partners,” said S Iswaran. “We should not prejudge the outcome.”

FTA review – ILO conventions, geographical indications.

The digital negotiations are part of a wider package of measures and initiatives ranging from climate change mitigation to mobility and connectivity – such as mutual recognition of COVID-19 certificates – currently underway in the EU Singapore relationship.

This week’s meeting was also part of a review of the implementation of the FTA.

A trade and sustainable development board was launched to oversee the implementation of the agreement’s labour and environment commitments – and oversee Singapore’s ratification of two outstanding so-called ‘core’ International Labour Organisation conventions related to non discrimination and freedom of association. Singapore also registered three more EU food and wine names under the trade agreement’s geographical indications chapter.

The two sides also discussed carbon pricing as Singapore raised concerns over the EU’s planned carbon border adjustment mechanism.

 

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