Singapore-South Korea digital economy deal to sync up on data, payments
Singapore has finalised negotiations with South Korea on a digital economy agreement that will see both nations collaborate across several areas, including cross-border online payments, data flows, cryptography, and artificial intelligence (AI). The partnership is touted to establish “forward-looking” digital trade rules and drive interoperability between digital systems.
South Korea also will be the first Asian market to sign on for Singapore’s Digital Economy Agreement, the latter’s fourth following similar pacts with the UK, announced last week, as well as Australia and Chile and New Zealand.
Under the digital agreement, data localisation would not be permitted unless necessary for specific purposes, such as regulatory access, the two partners said Wednesday in a joint statement. This would facilitate secured data transfers between organisation in both nations and enable them to decide where they want to store and process their data, according to their business requirements.
The digital economy pact also would deepen bilateral collaboration in emerging segments such as personal data protection, online payments, and source code security. In addition, both countries would explore potential cross-border opportunities in AI innovation and see South Korea supporting Singapore’s efforts in developing multilateral rules in e-commerce. The latter currently is co-convenor of the World Trade Organization Joint Statement Initiative on E-commerce.
Specifically, the Singapore-South Korea digital economy agreement would cover 11 modules under three broad areas spanning digital trade, trusted data flows, and trusted digital systems and participation. Bilateral efforts, for instance, would look to develop secured cross-border digital payments with “transparent and facilitative rules”, such as open application programming interfaces (APIs) and the adoption of internationally accepted standards.
To facilitate the exchange of key commercial documents, both countries would recognise electronic versions of trade administration documents and collaborate on initiatives to drive the adoption of data exchange systems. Businesses operating in the two markets also would be permitted to transfer information cross-border, including data generated or held by financial institutions, if all parties complied with requisite regulations and deployed adequate personal data protection.
In the area of AI, Singapore and South Korea would encourage the adoption of governance and ethics frameworks that supported trusted and responsible use of AI-powered technologies. They also would ensure local organisations that used cryptography could do so with “trust” that private keys and related technologies deployed in both market environments were protected. For one, neither country would require the transfer or access to such tools as a condition of market access.
This rule would be extended to source code protection, in which neither nation would require the transfer or access to software codes as a condition of market access. This included algorithms.
The growth of small and midsize businesses (SMBs) in both countries would be cultivated through platforms that help these organisations connect to international suppliers, buyers, and other potential partners.
Similar to the UK agreement, Singapore’s pact with South Korea included collaboration in digital identities. Both Asian markets would drive interoperability between their respective digital identity regimes, with the goal to deliver more reliable identity verification and faster application processing. Such initiatives aimed to cut cross-border trade barriers and enable both enterprises and consumers to more easily and securely navigate their digital economies.
Singapore’s Second Minister for Trade and Industry Tan See Leng said: “[The agreement] will strengthen the digital connectivity between Singapore and the Republic of Korea, and add to our already robust economic ties. By aligning standards, enabling trusted data flows and allowing cross-border digital transactions to take place more seamlessly, the Korea-Singapore Digital Partnership Agreement will open up opportunities for our businesses and people in the rapidly growing digital economy.”
Seoul was Singapore’s eighth largest trade partner last year, with bilateral trade clocking at SG$44.6 billion ($32.58 billion), while Singapore was South Korea’s ninth largest investor in Asia in 2019, pushing SG$8.37 billion ($6.11 billion) worth of investments.