EU and Singapore Sign Digital Trade Agreement: An Advanced Legal Framework for Cross-Border Digital Commerce
Key Takeaway
On May 7, 2025, the European Union and Singapore have signed a Digital Trade Agreement aimed at facilitating online trade in goods and services, as well as cross-border data flows. (1) This ambitious legal framework is designed to strengthen trust among economic players and support the growth of a digital space free from unjustified barriers.
The Digital Trade Agreement signed on May 7, 2025 between the European Union and the Republic of Singapore establishes binding rules to promote cross-border digital trade, free data flows, legal recognition of electronic contracts, source code protection, and cybersecurity cooperation. This article outlines the purpose of the agreement, the sectors it covers, the safeguards it offers for businesses and consumers, and the next steps before it enters into force.
1. Why a New Trade Agreement Between the EU and Singapore?
The Digital Trade Agreement (DTA) builds on the EU–Singapore Free Trade Agreement (EUSFTA) signed in 2018 and reinforces the momentum created by the EU–Singapore Digital Partnership (EUSDP) signed in 2023.
Despite their differences in size (450 million people in the EU versus 5.9 million in Singapore), (2) trade between the two parties is already highly developed. Singapore serves as Southeast Asia’s commercial hub and gateway to regional markets. It is also the EU’s largest trading partner in Southeast Asia. The Singaporean economy is heavily services-based, particularly in financial services. Europe has a strong presence in Singapore, with more than 10,000 European companies having established regional headquarters or subsidiaries there.
In return, the agreement should enable Singaporean companies to intensify their trade relations with EU Member States.
The DTA establishes binding rules on the digital exchange of goods and services. By removing barriers to the development of electronic commerce, the rules set out in the DTA aim to accelerate the growth of trade between the EU and Singapore by boosting entrepreneur and consumer confidence and ensuring greater legal certainty for bilateral transactions.
2. Objectives of the Digital Trade Agreement (DTA)
2.1 Areas Covered by the Agreement
The purpose of the Digital Trade Agreement is to facilitate digital trade and cross-border data flows between the European Union and Singapore.
The agreement applies to digital trade in goods and services, including public procurement carried out electronically. It covers sectors such as telecommunications services, IT services, financial services, and more generally, any commercial transaction that can be conducted electronically.
The audiovisual sector is excluded from the scope of the DTA.
2.2 Purpose of the DTA
The DTA pursues multiple objectives, including the following key areas:
- Cross-border data flows: The agreement prohibits unjustified data localization requirements that would restrict the transfer of personal or commercial data to or from either party's territory. This provision does not affect each party’s respective regulations on personal data protection;
- Permanent ban on customs duties on electronic transmissions between the EU and Singapore;
- Legal recognition and validity of contracts concluded electronically, including electronic signatures, e-invoicing, and authentication procedures;
- Protection of individuals and legal entities from being required to disclose source code in the context of importing, exporting, distributing, or using software. Disclosure may only be required for legitimate purposes pursuant to regulatory or judicial proceedings, and must comply with the procedural rules of the relevant jurisdiction;
- Consumer protection against abusive or fraudulent practices, including unsolicited online marketing;
- Guaranteed access to the internet for consumers, with internet service providers required to treat traffic without discrimination (net neutrality principle);
- Application of the open data principle to public sector information, ensuring free access and reuse, including for commercial purposes;
- Cybersecurity cooperation, aiming to strengthen response to cyberattacks, detect and limit intrusions, and prevent the spread of malicious code.
The DTA establishes a framework of digital trade rules that the EU and Singapore commit to implement, with the aim of fostering a stable legal environment, free from unjustified barriers and respectful of individual rights and obligations.
The DTA must still be ratified by both parties before entering into force, including approval by the European Parliament.
(1) Agreement on Digital Trade between the European Union and the Republic of Singapore (https://www.bilaterals.org/IMG/pdf/eu-singapore_text_of_the_digital_trade_agreement.pdf)
(2) According to 2023 data
Bénédicte DELEPORTE
Avocat
Deleporte Wentz Avocat
www.dwavocat.com
June 2025