Britain Agrees on a Digital Trade Deal with Singapore
After months of negotiations, the UK and Singapore have finally reached an agreement on a digital trade deal. Come take a look at our article to learn more about this new trade deal.
The UK has secured an agreement in principle (AIP) with Singapore on a Digital Economy Agreement (DEA). This AIP is a stepping stone to a contract between the European and Asian countries, which came to fruition after six months of intense negotiations. It is the first digital trade pact signed by a European country, and was reached between Anne-Marie Trevelyan, the UK's International Trade Secretary, and S. Iswaran, Singapore's Minister-in-Charge of Trade Relations.
According to Trevelyan, “digital trade is creating a new global economy, but it is still largely governed by old-fashioned rules that pre-date the digital revolution of the past 20 years. We’re using our independent trade policy to strike ground-breaking agreements that update these rules for the digital age and connect UK businesses to the biggest and fastest growing markets in the world.”
What the Deal Will Bring
Singapore is Britain's largest trade and investment partner in Southeast Asia, and this deal will boost the UK economy by £151 billion while also lifting wages, enabling workers in the digital economy to earn around 50% more than the UK average. A summary of the DEA revealed it will cut costs, slash red tape, and pave the way for a new era of trade by overhauling outdated trade rules that affect goods and services exporters.
In October 2021, the UK's G7 Presidency agreed on ground-breaking digital trade principles to modernize trade and spread the advantages of technology more widely. Since then, the European country has sealed new agreements with Japan, Australia, and New Zealand that all contain advanced digital chapters for all the countries involved. However, the DEA with Singapore will overhaul trade rules, so they are tailored to UK business, making it easier for the Britons to target new opportunities in both Singapore and lucrative Asian markets.
The DEA will support the UK’s bid to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) as well. The CPTPP is a free trade agreement (FTA) between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam. This agreement will make it easier for the UK to penetrate the wider Indo-Pacific region through the Singaporean route.
The agreement will also cover major areas of the digital economy, including data flows, artificial intelligence, fintech, digital identities, and legal technology. Electronic payments are the fintech aspect which this deal will cover to promote seamless payment across borders.
It will also encourage paperless trading to replace time-consuming border operations with e-signatures, e-contracts, and electronic invoicing. Cross-border data flows will help improve real-time information exchange, as well as cryptography to protect information transmitted between firms in these two nations.
Britain and Singapore have signed three memorandums of understanding on digital trade facilitation, digital identities, and cybersecurity to make transactions easier and safer, while boosting business in both countries.
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