- Korea and Singapore sign Digital Partnership Agreement 2022-11-23
Minister for Trade Dukgeun Ahn met with Singapore’s Second Minister for Trade and Industry Tan See Leng in Singapore on November 21 and signed the Korea-Singapore Digital Partnership Agreement (hereinafter “KSDPA”).
The KSDPA was settled in December 2021, followed by a legal examination and deliberation process. Signing of the KSDPA concludes the two countries’ negotiation procedures.
One of the key accomplishments of this year’s ASEAN summit meetings, the KSDPA is regarded as Korea-ASEAN trade cooperation strategy put into practice to lead the regional trade order and expand digital economic collaboration, starting with ASEAN’s digital hub Singapore.
Trade Minister Ahn remarked in the signing ceremony that the “central axis of global trade order is shifting from previous issues of opening up the products and services market to more diverse issues of solidarity and cooperation, which are directly linked to digital economy, supply chain, carbon neutral and overall industry competitiveness.”
He noted that “Korea-Singapore FTA was Korea’s second FTA, and just as it served as the groundwork for Korea’s vast FTA network establishment, the KSDPA will likewise serve as the model and stepping stone in Korea’s expanding digital trade network.”
The trade chief added that “he looked forward to closer cooperation in the discourse for setting the digital trade order in the Asia-Pacific region, such as building a broader DEPA network and furthering IPEF digital negotiations.”
The KSDPA is meaningful in the following three aspects.
One, it will boost Korean companies’ ASEAN market penetration.
“Shopee” and “Lazada” are some of Singaporean e-commerce platforms used widely across the entire ASEAN region, connecting young and Hallyu-loving ASEAN online consumers to Korean companies.
Because KSDPA allows the digitized trade and clearance process to reduce transaction costs and lowers entry barriers for SMEs and startups, exports of Korean consumer goods like cosmetics, clothes and food products are expected to benefit from tapping into these e-commerce platforms.
Moreover, the agreement ensures nondiscriminatory treatment for digital products as well as customs-free transmission of content, which helps to stabilize the business environment for Korea-Singapore digital content businesses.
Two, Singapore is the base for global companies wanting to enter the ASEAN market, thanks to its free and open business environment. The nation’s innovative technologies are recently earning its reputation as a testbed for startups as well.
Korean companies with strong manufacturing competitiveness are also making use of their Singapore base to advance their services through technological innovation and data.
As a result, it is anticipated that the KSDPA will accelerate data-based business cooperation between the two countries.
Three, Singapore is spearheading the global movement for digital trade agreements as co-convenor of WTO e-commerce negotiations alongside Australia and Japan, and sealing multiple digital agreements over the last two years with countries like New Zealand, Chile, Australia and the UK.
The KSDPA is the first digital partnership for Korea, and based on this achievement, Korea plans to seek closer cooperation in establishing the digital trade order across the Asia-Pacific region by expanding the Digital Economy Partnership Agreement (DEPA) network and engaging in negotiations on digital areas of the Indo-Pacific Economic Framework for Prosperity (IPEF).
In addition, the two trade leaders signed the memorandum of understanding (MOU) for Korea-Singapore Digital Economy Dialogue, of which the first talks on digital economy are slated for early next year.
The above Dialogue will include both government agencies and private institutions, corporations and academia in seeking out and supporting joint win-win projects.
Talks for a mutually beneficial joint project are underway in accordance with terms under the KSDPA. Soon to be signed are MOUs for digital certificate of origin (COO), data exchange for digital customs clearance paperwork review, and joint R&D projects for AI ethics and governance systems.
The Korean government will implement necessary procedures in tandem with Singapore for KSDPA to come into force in early 2023.