On Wednesday, 7 May, the European Union and Singapore signed a landmark Digital Trade Agreement (DTA), cementing their shared ambition to deepen cooperation in the digital economy. Commissioner for Trade and Economic Security Maroš Šefčovič and Singapore’s Minister-in-charge of Trade Relations Grace Fu Hai Yien formalised the pact in Brussels, aiming to create a “high-standard framework” that facilitates cross-border data flows, bolsters consumer trust and enhances growth between both partners.
What the DTA means
In an era where over 60% of global GDP is linked to digital transactions, the EU-Singapore DTA is a forward-thinking accord. It’s a standalone agreement, distinct from the existing Free Trade Agreement, specifically designed to address the unique opportunities and challenges of the digital age. The core idea is to establish clear and modern rules for digital trade, ensuring that as technology races ahead, the frameworks governing it keep pace.
This agreement isn’t just about facilitating trade, it’s about building a digital environment based on shared principles. The EU and Singapore are keen to champion open and competitive digital markets that are transparent, fair, and free from unnecessary obstacles to international commerce. A central element of the DTA is prioritising individuals and their rights, which aligns with the EU’s established approach to digital and data governance. As Commissioner Maroš Šefčovič and Minister Grace Fu highlighted in their joint statement: “The Agreement reaffirms our shared commitment to foster a secure and inclusive digital economy, and to support the digital transformation of our societies.”
Benefits
The DTA is set to provide practical benefits for everyone involved. For consumers, it offers improved online protection and increased trust when shopping online. This includes more transparent rules regarding electronic contracts, secure methods for electronic authentication, and safeguards against unsolicited spam.
For businesses, especially SMEs, the DTA offers much-needed legal certainty and aims to simplify cross-border digital trade. One significant aspect is the commitment to trusted cross-border data flows. The agreement prohibits unjustified data localisation measures, which require businesses to store data within a specific country’s borders.
Additionally, the agreement safeguards valuable intellectual property, including the software’s source code, from unauthorized disclosure. It also ensures that customs duties will not be imposed on electronic transmissions, making digital trade more cost-effective.
Next steps
Both parties will now undertake domestic ratification procedures. In the EU, this requires consent from the European Parliament. The agreement was already authorised for signature by the EU Council in April 2025. Once in force, the DTA will serve as a blueprint for future digital-trade pacts worldwide, reinforcing a global ecosystem in which innovation, resilience and fairness go hand in hand.
