COMMISSION STAFF WORKING DOCUMENT on digital trade negotiations with the Republic of Korea and with Singapore Accompanying the document Recommendation fo a Council Decision authorising the opening of negotiations for digital trade disciplines with the Republic of Korea and with Singapore
Date: 2023-04-14
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: Singapore, South Korea, digital economy, electronic commerce, extra-EU trade, international trade, negotiation of an agreement (EU), trade cooperation

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.4.2023  SWD(2023) 85 final  COMMISSION STAFF WORKING DOCUMENT on digital trade negotiations with the Republic of Korea and with Singapore Accompanying the document Recommendation fo a Council Decision authorising the opening of negotiations for digital trade disciplines with the Republic of Korea and with Singapore {COM(2023) 230 final}  
 
 
Contents 
1. 

Introduction .......................................................................................................................................... 2 

2.  Digital trade ........................................................................................................................................... 2 

a.  Defining digital trade ........................................................................................................................ 2 

b. 

c. 

The extent and value of digital trade ................................................................................................ 3 

Barriers to digital trade ..................................................................................................................... 5 

d.  Digital trade rules .............................................................................................................................. 6 

3.  Digital trade and the European Union .................................................................................................. 8 

a. 

b. 

The European Union’s digital economy ............................................................................................ 8 

The EU’s approach to digital trade.................................................................................................... 9 

i.  Multilateral digital trade rules ...................................................................................................... 9 

ii.  Bilateral digital trade rules .......................................................................................................... 10 

iii.  EU digital trade disciplines .......................................................................................................... 10 

4.  Digital trade and Singapore ................................................................................................................ 11 

a. 

b. 

Singapore’s digital economy ........................................................................................................... 11 

Singapore’s approach to digital trade ............................................................................................. 14 

i.  Multilateral digital trade rules .................................................................................................... 14 

ii.  Regional digital trade rules ......................................................................................................... 14 

iii.  Bilateral digital trade rules .......................................................................................................... 14 

5.  Digital trade and the Republic of Korea .............................................................................................. 15 

a.  Republic of Korea’s digital economy ............................................................................................... 15 

b.  Republic of Korea’s approach to digital trade ................................................................................ 17 

i.  Multilateral digital trade rules .................................................................................................... 17 

ii.  Regional digital trade rules ......................................................................................................... 18 

iii.  Bilateral digital trade rules .......................................................................................................... 18 

6.  Conclusion ........................................................................................................................................... 18 

1 

 
 
 
 
 
1. 

Introduction 

This  staff  working  document  accompanies  the  Commission  recommendation  for  a  Council  Decision 
authorising the opening of negotiations with the Republic of Korea and with Singapore on digital trade 
rules1. Such negotiations will build on the strengthened cooperation on digital trade issues created by the 
Digital Partnerships formalised between the European Union and, respectively, the Republic of Korea and 
Singapore. On the basis of the non-binding political commitments in the Digital Partnerships and Digital 
Trade Principles with the Republic of Korea and with Singapore, the negotiations will be used to pursue 
binding  digital  trade  disciplines.  The  staff  working  document  describes  the  context  in  which  these 
negotiations  will  take  place,  highlighting  the  increasing  importance  of  digital  trade  and  the  efforts  of 
countries  around  the  world  to  develop  international  rules  in  this  area.  It  also  presents  the  different 
approaches to digital trade rules adopted by the European Union, the Republic of Korea and Singapore.  

2.  Digital trade  

a.  Defining digital trade 

The exponential development of information and communications technologies (ICTs) during the last two 
decades  has  created  a  digital  economy  with  new  ways  to  produce,  market  and  consume  goods  and 
services.  It  has  led  to  businesses  innovation,  opened  markets,  facilitated  investments  and  generated 
economic growth and created new quality jobs2.  

The  digitalisation  of  the  economy  worldwide  has  particularly  changed  the  scale,  scope  and  speed  of 
international trade, which is increasingly enabled by ICTs. Digitalisation has allowed businesses to reach 
and  sell  goods  and  services  to  a  larger  number  of  customers  around  the  world  and  greatly  expanded 
consumers’ choice. New and innovative digital tools such as flexible cloud computing services have been 
introduced in production processes and made business overcome barriers to growth. Small and medium 
enterprises (SMEs) especially can benefit from these opportunities and become more easily integrated in 
global value chains3.  

Whilst there is no internationally recognised definition of digital trade, there is growing consensus that it 
encompasses  all  trade  in  goods  and  in  services  enabled  by  ICTs.4  This  includes  a  broad  spectrum  of 
transactions in which ICTs play a fundamental role. It covers in particular trade in goods and services that 
are ordered digitally and physically delivered (such as the online purchase of a physical book or the online 
booking of a holiday apartment), trade in goods and services that are ordered and delivered digitally (such 

1 COM(2023) 230 final.  
2  World  Economic  Forum  (WEF),  The  future  of  jobs  report  2020,  October  2020,  www.weforum.org;  Avom,  D., 
Dadegnon,  A.  and  Igue,  C.,  ‘Does  digitalization  promote  net  job  creation?  Empirical  evidence  from  WAEMU 
countries’, Telecommunications Policy, Volume 45, Issue 8, September 2021, www.sciencedirect.com   
3 Ganne, E. and Lundquist K., ‘The digital economy, GVCs and SMEs’, In: Technological innovation, supply chain trade, 
and workers in a globalised word: Global value chain development report 2019, 2019, www.wto.org  
4 Organisation for Economic Cooperation and Development (OECD), ‘Digital Trade’, OECD Trade Policy Papers, July 
2017,  https://www.oecd-ilibrary.org/trade/;  The term ‘digital trade’ is often used interchangeably with the term 
‘electronic  commerce’  or  ‘e-commerce’,  which  in  the  context  of  the  World  Trade  Organisation  (WTO)  has  been 
defined as the production, distribution, marketing, sale or delivery of goods and services by electronic means. 

2 

 
 
                                                           
 
as an e-book or software acquired online), or the use of digital technologies in a production or distribution 
process (such as the tracking of road cargo in real time).  

A key aspect of digital trade concerns the cross-border flow of data. With the development of the digital 
economy data has become a key factor of production that has been the basis for new services such as 
cloud  computing  or  the  internet  of  things.  Different  categories  of  data  may  be  part  of  digital  trade 
transactions, including data that can be used to identify natural persons, i.e. personal data.  

Digital trade has a far-reaching impact throughout the economy. Goods and services ordered, acquired, 
produced  or  supplied  through  ICTs  across  the  world  will  often  be  used  as  intermediate  inputs  for 
downstream production and value creation. Digital trade thus facilitates the creation and development of 
global value chains.  

b.  The extent and value of digital trade 

Whilst  digital  trade  is  undisputedly  growing  in  importance  on  a  global  scale,  it  is  very  challenging  to 
measure its exact value.5 First, the lack of an internationally recognised definition makes it difficult to rely 
on and to compare existing figures.  

Moreover,  on  a  practical  level,  digital  trade  is  not  fully  reflected  in  existing  figures.  In  contrast  with 
physically delivered goods and services, which usually involve customs and other related authorities and 
procedures, digitally delivered services are typically not subject to the same level of scrutiny and existing 
figures often exclude smaller transactions as part of a de minimis threshold. That may result in a tendency 
to underestimate digital trade notably in the business-to-consumer context. Further, existing figures also 
underestimate trade in online services that are not paid at the point of delivery, such as online search or 
browser  services.  6 Finally,  measuring  the  impact  of  digital  trade  on  global  value  chains  is  particularly 
challenging. Whereas it may be possible to measure initial transactions of goods and services enabled by 
ICTs, this is more difficult for follow-on transactions and downstream added value. An example concerns 
the functioning of so-called ‘infomediaries’ that create added value on the basis of data generated from 
transactions that took place on digital platforms. Such data may be used for e.g. marketing purposes or 
website optimisation. As a result, the impact of digital trade on the economy is often underestimated.7  

The  Organisation  of  Economic  Cooperation  and  Development  (OECD),  the  World  Trade  Organisation 
(WTO) and the International Monetary Fund (IMF), have tried to overcome these challenges and develop 
new  methods  specifically  suited  to  measure  digital  trade.  Their  joint  ‘Handbook  on  measuring  digital 
trade’ is a useful contribution in this regard, but it recognises that more progress is needed.8  

In view of these challenges, existing figures only provide for estimates of the value of digital trade. For 
instance, the World Bank estimated that in 2018 global trade in certain digital services such as computer 
network  maintenance,  entertainment,  broadcasting  and  financial  management  services,  amounted  to 

5 Mourougane, A., ‘Measuring digital trade’, OECD Going Digital Toolkit Notes, 2021, www.oecd.org 
6 United Nations Conference on Trade and Development (UNCTAD), Digital Economy Report 2021. Cross-border data 
flows and development: for whom the data flow, 2021, www.unctad.org   
7  Lundquist K. and Kang, J.W., ‘Digital Platforms and Global Value Chains’, In: Technological innovation, supply chain 
trade, and workers in a globalised word: Global value chain development report 2021, 2021, www.wto.org 
8 OECD, Handbook on Measuring Digital Trade, 2020, www.oecd.org  

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USD  2.7  trillion  globally.  It  suggested  that  the  share  of  these  services  in  global  trade  in  services  has 
increased significantly, from 20 percent in the early 2000s to around 50 percent in 2021.9 However, these 
estimates do not take account of digitally enabled trade in other services or goods.  

The  United  Nations  Conference  on  Trade  and  Development  (UNCTAD)  reported  a  similar  trend  and 
estimated an increase in global exports of digitally deliverable services (including telecommunications, 
computer  and  information  services,  financial  and  insurance  services  and  business  services  including 
professional and management consulting), from USD3.3 trillion in 2019 to USD3.8 trillion in 2021. UNCTAD 
also reported a sharp increase of the worldwide share of digitally deliverable services as part of the total 
value of services exports: from 52% in 2019, to 64% in 2020 and 63% in 2021.10 Although this relative 
growth has been influenced by the contraction due to the COVID-19 pandemic of trade in other services 
(such as transport and travel services), it shows a clear growing trend. Again, these figures do not take 
account of digitally enabled trade in other services or goods.  

UNCTAD also projected that the global value of e-commerce (including both business-to-consumer and 
business-to-business transactions) reached USD26.7 trillion in 2019, corresponding to about 30% of the 
global Gross Domestic Product (GDP) and representing an increase of 4% from 2018. The overall majority 
of the global value of e-commerce was estimated to be composed of business-to-business transactions, 
representing  USD21.9  trillion  or  82%  of  the  global  value  of  digital  trade.  Business-to-consumer 
transactions  were  estimated  at  USD4.9  trillion  in  2019,  representing  an  increase  of  11%  over  2018.  11 
However, a significant part of these transactions took place at domestic level, and UNCTAD estimated that 
only 9% of the total business-to-consumer transactions involved cross-border sales, i.e. USD440 billion in 
2019, representing an increase of 9% over 2018. UNCTAD did not provide for estimates of the value of 
cross-border business-to-business transactions.   

In terms of data flows, the  World Bank  estimated that by 2022 internet  traffic was expected to reach 
150.000 Gigabits of traffic per second, a 1000-fold increase compared to 156 Gigabits in 2002.12 However, 
these figures do not specify the source and destination of the data and thus do not differentiate between 
domestic and cross-border data flows. In addition, the figures do not specify the type of data concerned 
(such as whether they relate to video or software, personal or non-personal data), which makes it difficult 
to assess the relevance of the data flows to digital trade.  

In the context of trade-related data flows, the OECD calculated that in 2019, exports of data services, such 
as database conception, data storage and the dissemination of data and databases, search engine services 
that find Internet addresses for clients who input keyword queries etc., from the EU to the rest of the 
world amounted to USD18.6 billion, and from the United States to the rest of the world to amount to 
USD10.2 billion. Exports of such data services between 2010 and 2019 from the EU increased by 4.7 times 
and  doubled  from  the  United  States.13  The  OECD  also  calculated  that  in  2019  imports  of  those  data 
services from the rest of the world to the EU amounted to USD11.8 billion, and from the rest of the world 

9 The World Bank, ‘Crossing Borders’, In: World Development Report 2021, 2021, https://wdr2021.worldbank.org/  
10 United Nations Conference on Trade and Development (UNCTAD),  Supporting countries to measure the digital 
economy for development, December 2022, www.unctad.org  
11 UNCTAD, Estimates of global e-commerce 2019 and preliminary assessment of Covid-19 Impact on online retail 
2020, May 2021, www.unctag.org   
12 Supra note 6.   
13 OECD, Measuring the value of data and data flows, December 2022, www.oecd.org  

4 

 
 
                                                           
to the United States amounted to USD2.7 billion. The import of such data services between 2010 and 2019 
to the EU increased by 2.5 times, and by 1.7 times to the United States.  

However, these statistics only measure the value of international trade in data services where data are 
the main object of the transaction. They do not include the value of data that are traded as part of an 
international transaction in goods or services. By way of example, this could concern the maintenance 
service provided in relation to plane engines as part of which data about the performance of such engines 
is  being  created,  processes  and  transmitted  across  borders.  With  the  development  of  the  internet  of 
things such processing and transmission are becoming increasingly important. As such, statistics based on 
the above definition are likely to underestimate the actual value of trade flows in data.  

c.  Barriers to digital trade 

With the growth of digital trade over recent years, an increasing number of barriers to digital trade have 
been  identified.  Different  categories  of  digital  trade  barriers  that  are  often  discerned  are:  i)  fiscal 
restrictions  (tariffs  and  trade  defence,  taxation  and  subsidies,  public  procurement),  ii)  establishment 
requirements (foreign investment, competition policy, business mobility), iii) restrictions on data (data 
policies, intermediary liability, content access), and iv) trading restriction (quantitative trade restrictions, 
standards, online sales and transactions).14 These barriers may have a negative effect on digital trade by 
restricting access to markets for businesses or discriminating against foreign companies as compared to 
domestic competitors. Such barriers may limit the ability of businesses and consumers to engage in digital 
trade and benefit from it.  

In  certain  cases,  barriers  to  digital  trade  may  result  from  domestic  regulation  that  countries  enact  to 
pursue certain legitimate public policy objectives, such as the protection of privacy and personal data, 
consumer protection or cybersecurity. However, barriers to digital trade may also result from measures 
enacted for protectionist reasons, to give an advantage to domestic businesses over foreign competitors.  

By way of example, countries may give an advantage to domestic companies by requiring foreign business 
to  transfer  or  disclose  to  competitors  their  key  technologies,  such  as  software  source  code  or 
cryptography related technologies.15 Such requirements may expose key assets or intellectual property 
developed by a business and generally have a chilling effect on their openness to engage in cross-border 
operations.  

Countries  may  also  impose  unjustified  restrictions  to  cross-border  data  flows,  which  may  have  a 
detrimental effect on the ability of businesses and consumers to engage in digital trade across borders. 
Data localisation restrictions may affect any business that uses the internet to produce or deliver goods 
and services. Whereas the free flow of data, including both personal and non-personal data, is guaranteed 
in the European Union based on a common high level of protection16, this is not the case at international 

14  European  Centre  for  International  Political  Economy  (ECIPE),  Digital  Trade  Restrictiveness  Index,  April  2018, 
www.ecipe.org  
15 Dorobantu, C., Ostmann, F., & Hitrova, C., ‘Source code disclosure: A primer for trade negotiators’. In: I. Borchert 
&  L.  A. Winters  (Eds.), Addressing  Impediments  to  Digital  Trade (pp.  105-140).  London:  CEPR  Press  2021,  www. 
turing.ac.uk.  
16 Regulation (EU) 2016/679 (4.5.2016) and Regulation (EU) 2018/1807 (28.11.2018).  

5 

 
 
                                                           
level. A study of 2021 suggests that EU exports would decrease by around 4%, amounting to 1% GDP loss 
per year, if the EU could not rely on its existing transfer mechanisms under the General Data Protection 
Regulation and if trade partners would increase their overall levels of restrictions on cross-border data 
flows. Cumulatively, this would represent a loss of €1.3 trillion, by 2030. This study also indicates that EU 
exports would grow by more than 2% per year if the EU and major trade partners were to adopt measures 
facilitating cross-border data transfers. This would add 0.6% to GDP per year and amount to a cumulative 
worth of around €720 billion, by 2023.17  

Several  initiatives  have  been  taken  to  identify  and  list  barriers  to  digital  trade  in  order  to  inform 
businesses, consumers and policy makers. The OECD has created a database of barriers to trade in digitally 
enabled  services  across  80  countries  and  economies  in  its  Digital  Services  Trade  Restrictiveness  Index 
(STRI).18 The European Centre for International Political Economy (ECIPE) has developed a Digital Trade 
Restrictiveness Index (DTRI) that measures how countries in the world restrict digital trade.19 

The Digital STRI shows that some of the most common barriers involve impeding access to communication 
infrastructure  and  the  flow  of  data  across  networks.  A  number  of  barriers  also  affect  electronic 
transactions and payments. However, other barriers such as the obligation to establish a local presence 
before  engaging  in  digital  trade  are  common  in  several  countries.  An  important  challenge  to  trade  in 
digitally enabled services identified by the Digital STRI relates to measures affecting infrastructure and 
connectivity and measures affecting the movement of data such as data localisation restrictions. 

d.  Digital trade rules 

Many countries around the world are trying to develop digital trade rules  to facilitate digital trade, to 
address protectionist measures and to ensure legal certainty for business engaged in cross-border digital 
trade.20 In January 2019, a group of WTO members, including the EU, launched a plurilateral negotiation 
in the context of the WTO Joint Statement Initiative on e-commerce (e-JSI).21 A total of 87 WTO Members 
are  currently  engaged  in  these  negotiations  that  cover  rules  on,  amongst  other  things,  facilitating 
electronic  transactions,  enhancing  consumer  and  business  trust,  addressing  protectionist  barriers, 
protecting computer source code, facilitating online trade in goods, improving the regulatory conditions 
for telecommunications services, and granting market access in services and goods that are key for digital 
trade.22 

In parallel to these global efforts to develop international standards on digital trade, a group of countries 
in the Indo-Pacific region have been in the last years developing a rich network of regional and bilateral 
agreements that are progressively building such standards in ways that are not always aligned with the 

17  Frontier  Economics,  The  value  of  cross-border  data  flows  to  Europe:  risks  and  opportunities,  2021, 
www.digitaleurope.org  
18 OECD, Digital Services Trade Restrictiveness Index Simulator,  www.oecd.org  
19 Supra note 14. 
20 Burri, M., ‘Towards a new Treaty on Digital Trade’, Journal of World Trade, Volume 55, Number 1 (2021): 77-100, 
www.digitaltradelaw.ch  
21 Joint Statement on electronic commerce of 25 January 2019, WT/L/1056.  
22 World Trade Organisation, Joint Initiative on E-commerce , www.wto.org  

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EU approach. These standards are sometimes set out in a dedicated chapter with digital trade rules of a 
comprehensive free trade agreement providing detailed rules on market access.  

In  particular,  in  2018  several  Indo-Pacific  countries  concluded  the  Comprehensive  and  Progressive 
Agreement for Trans-Pacific Partnership (CPTPP).23 The CPTPP incorporates by reference the dedicated 
chapter on electronic commerce  from the Trans-Pacific Partnership (TPP) that was  signed but  has not 
been ratified and has not entered into force.24 This electronic commerce chapter includes provisions on 
customs  duties,  non-discriminatory  treatment  of  digital  products,  domestic  electronic  transactions 
frameworks, electronic authentication and electronic signatures, online consumer protection, personal 
information  protection,  paperless  trading,  access  to  and  use  of  the  internet  for  electronic  commerce, 
cross-border  transfer  of  information  by  electronic  means,  internet  interconnection  charge  sharing, 
location  of  computing  facilities,  unsolicited  commercial  electronic  messages,  regulatory  cooperation, 
cooperation on  cybersecurity  and  source  code.  A  growing  number  of  countries  have  in the meantime 
applied to join the CPTPP, including the United Kingdom in February 2021 and China in September 2021.25 
The parties to the agreement are currently assessing these applications. 

Moreover,  in  July  2020,  the  United  States,  Mexico  and  Canada  concluded  their  United  States-Mexico-
Canada  Agreement  (USMCA)  to  substitute  the  North  America  Free  Trade  Agreement  (NAFTA).  The 
agreement also includes a comprehensive digital trade chapter that comprises significant commitments 
to facilitate digital trade between the countries.26  

In other cases, countries in the Indo-Pacific region have concluded specific agreements on digital trade, 
often  referred  to  as Digital  Agreements  or  Digital  Economy  Agreements27.  These  are typically  used  by 
parties to those agreements to pursue domestic regulatory alignment that eliminates barriers to digital 
trade, provides a level playing field for businesses and facilitates digital trade. 

In  June  2020,  Australia,  Chile  and  Singapore  concluded  the  first  of  such  agreements  with  their  Digital 
Economy Partnership Agreement (DEPA).28 The DEPA is open to other WTO Members,  in December 2020 
Canada  expressed  an  interest  in  joining  and  negotiations  with  the  Republic  of  Korea  also  started  in 
October 2021. The DEPA aims to cover various aspects of the digital economy that support trade in the 
digital era and includes provisions on business and trade facilitation, the treatment of digital products and 
related  issues,  data  issues,  business  and  consumer  trust,  digital  identities,  emerging  trends  and 
technologies, innovation and the digital economy, SME cooperation, and digital inclusion.  

23 A free trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New 
Zealand, Singapore and Vietnam. 
24 Office of the United States Trade Representative, Trans-Pacific Partnership (TPP) full text, www.ustr.gov  
25 United Kingdom, Formal Request to Commence UK Accession Negotiations to CPTPP, February 2021, www.gov.uk; 
Reuters, China applies to join Pacific trade pact to boost economic clout, September 2021, www.reuters.com  
26 Office of the United States Trade Representative, United States-Mexico-Canada Agreement, www.ustr.gov  
27 WEF, Digital economy agreements are a new frontier for trade – here's why, August 2022, www.weforum.org 
28  New  Zealand  Foreign  Affairs  and  Trade  Ministry,  Digital  Economy  Partnership  Agreement  (DEPA)  overview, 
www.mfat.govt.nz  

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In  May  2022  the  United  States  also  launched  with  several  other  countries  in  the  Indo  Pacific  region 
negotiations  for  an  Indo-Pacific  Economic  Framework  for Prosperity  (IPEF).29  The  IPEF  should  advance 
resilience,  sustainability,  inclusiveness,  economic  growth,  fairness,  and  competitiveness  for  the 
participating  countries’  economies,  which  together  represent  about  40  percent  of  global  GDP  and  28 
percent of global goods and services trade.30 The negotiations cover four pillars on 1) trade, 2) supply 
chains, 3) clean energy, decarbonization and infrastructure, and 4) tax and anti-corruption. The trade pillar 
is expected to include comprehensive digital trade rules.  

3.  Digital trade and the European Union 

a.  The European Union’s digital economy  

The  European  Union  and  its  Member  States  have  a well-developed  digital  economy  and  are  generally 
considered to have a high capacity and readiness to adopt digital technologies as a driver for economic 
development for businesses, government and society as a whole.31  

The  European  Green  Deal  communication  adopted  in  2019  presents  a  set  of  deeply  transformative 
policies.32  In  this  regard,  it  provides  that  the  EU  should  promote  and  invest  in  the  necessary  digital 
transformation and tools as these are essential enablers of the transformational changes needed for a 
more sustainable economy. The Commission set out its vision for the European Union’s digital transition 
by 2030 in the March 2021 Communication on a Digital Compass.33 The Communication announces the 
ambition to pursue digital policies that allow people and businesses to have a human-centered, inclusive, 
sustainable, and prosperous digital future. The Communication stresses that the EU will pursue an open 
digital economy based on the investment flows and innovation as an engine for prosperity as a starting 
point  for  its  policies,  while  strongly  promoting  the  EU’s  core  interests  and  values.  On  that  basis,  the 
European Union has recently adopted legislation governing important aspects of the digital economy such 
as  the  Data  Governance  Act,  the  Digital  Services  Act  and  the  Digital  Markets  Act.34  The  Commission 
recently also proposed new rules relevant to the digital economy, including for example a Data Act, an 
Artificial Intelligence Act, an Artificial Intelligence Liability Directive and a Cyber resilience Act.35  

The  Commission  also  proposed  concrete  targets  to  implement  the  EU’s  ambitions  for  its  digital 
transformation, which have been estimated could unlock €1.3 trillion in value by 2030.36 Amongst other 

29  Australia,  Brunei  Darussalam,  Fiji,  India,  Indonesia,  Japan,  the  Republic  of  Korea,  Malaysia,  New  Zealand, 
Philippines, Singapore, Thailand, and Vietnam. 
30  Office  of  the  United  States  Trade  Representative,  Indo-Pacific  Economic  Framework  for  Prosperity  (IPEF), 
www.ustr.gov  
31 International Institute for Management Development (IMD), World Digital Competitiveness Ranking 2022, 2022 
www.imd.org  
32 COM(2019) 640 final (11.12.2019).  
33 COM(2021) 118 final (9.3.2021).  
34  Regulation  (EU)  2022/868  (3.6.2022);  Regulation  (EU)  2022/2065  (27.10.2022);  Regulation  (EU)  2022/1925 
(12.10.2022). 
35 COM(2022) 68 final (23.2.2022); COM(2021) 206 final (21.4.2021); COM(2022) 496 final (28.9.2022); COM(2022) 
454 final (15.9.2022).  
36 Public First, Unlocking Europe's Digital Potential: How cloud computing can support the EU’s Digital Decade, 2022, 
https://awsdigitaldecade.publicfirst.co.uk/ 

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things,  the  Commission  defined  targets  to  ensure  gigabit  broadband  connection  coverage  for  all 
households and 5G coverage in all populated areas. The Digital Economy and Society Index (DESI) of 2022 
showed uptake of fixed broadband connections by 78% of all households in 2021 (up from 75% in 2019), 
with an uptake of at least 100 Mbps broadband by 41% of households in 2021 (up from 28% in 2019) and 
an  uptake  of  gigabit  connections  by  7.6%  of  householders  in  2021.  The  share of  EU  enterprises  using 
internet connections of more than 1 Gbps was 10 % in 2021. The DESI of 2022 indicated 5G coverage of 
66% of populated areas the EU.37 

The Commission also defined targets in terms of the integration of digital technologies by businesses by 
2030, including the use of e-commerce. Amongst other things, the DESI of 2022 showed that the level of 
digitalisation  of  businesses  is  growing  but  remains  uneven  across  EU  Member  States  and  economic 
sectors.38  More  than  19%  of  European  businesses  received  online  orders  in  202239,  with38%  of  large 
businesses and 18% of SMEs obtaining more than 1% of their turnover from e-commerce sales. In 2022, 
on average 17.6% of the turnover of enterprises was based on e-commerce sales.40 In 2021, 34% of EU 
businesses  purchased  sophisticated  or  intermediate  cloud  computing  services  and  incorporated  cloud 
technologies to improve their operations while reducing costs. The cloud uptake of large companies (60%) 
almost doubled that of SMEs (33%) in 2021.41  

b.  The EU’s approach to digital trade 

In its February 2021 trade policy review, the Commission recognised the growing importance of digital 
trade and identified establishing digital trade rules as a key priority.42 It undertook to support Europe’s 
digital agenda as part of its trade policy to ensure a leading position for the EU in digital trade and in the 
area of technology.  

i.  Multilateral digital trade rules 

An important element to achieve this objective is the conclusion of an ambitious and comprehensive WTO 
agreement  on  digital  trade.  The  Commission  is  committed  to  seeking  a  rapid  conclusion  of  the  eJSI 
negotiations, in which it participates on behalf of the EU.43 The EU’s objectives for the negotiations are to 
enhance global electronic commerce, facilitate the operations of businesses, including micro, small and 
medium  enterprises,  strengthen  consumers’  trust  in  the  online  environment  and  create  new 
opportunities to promote inclusive growth and development.44 

and 

Index 

(DESI), 

Society 

Economy 

European 

Commission, 

The  Digital 

37 
strategy.ec.europa.eu/en/policies/desi  
38 Supra note 35.  
39 Eurostat, Eurostat data browser, https://ec.europa.eu/eurostat/databrowser/product/view/ISOC_EC_ESELN2  
40 Supra note 37.   
41 Supra note 37.   
42 COM(2021) 66 final (18.2.2021).  
43  Council  of  the  European  Union,  Council  Decision  supplementing  the  negotiating  directives  for  the  Doha 
Development  Agenda  regarding  the  plurilateral  negotiations  of  rules  and  commitments  on  electronic  commerce 
(8993/19), 21 May 2019, www.consilium.europa.eu 
44 Communication from the European Union, EU proposal for WTO disciplines and commitments relating to electronic 
commerce, 26 April 2019, INF/ECOM/22.  

https://digital-

9 

 
 
                                                           
ii.  Bilateral digital trade rules 

The EU is also pursuing digital trade rules as part of its negotiations for bilateral free trade agreements 
with its partner countries. Whereas some of these digital trade rules mainly provide a basis for regulatory 
cooperation,  such  as  in  the  EU-Canada  Comprehensive  Economic  and  Trade  Agreement  (CETA)  that 
entered into force provisionally in 2017, more recent agreements provide for a comprehensive chapter 
on  digital  trade  rules.  For  instance,  the  EU-UK  Trade  and  Cooperation  Agreement  (EU-UK  TCA)  that 
entered into force on 1 May 2021 includes a full-fledged chapter on digital trade.45 The same applies to  
the EU-New Zealand trade agreement and the EU-Chile Advanced Framework Agreement, for which the 
negotiations were concluded in June 202246 and in December 202247 respectively. These chapters contain, 
amongst  other  things,  detailed  provisions  on  cross-border  data  flows,  the  protection  of  privacy  and 
personal data, customs duties on electronic transmissions, electronic contracts, electronic authentication 
and  trust  services,  the  transfer  of  or  access  to  source  code,  online  consumer  trust,  unsolicited  direct 
marketing communications, open government data, and regulatory cooperation on digital trade.  

The EU has also proposed specific digital trade chapters with similar disciplines for its ongoing negotiations 
for free trade agreements with Australia48, India49 and Indonesia50. The EU is also engaged in negotiations 
with Japan on cross-border data flows in the context of the EU-Japan Economic Partnership Agreement 
that entered into force on 1 February 2019.51  

In  the  September  2021  EU  strategy  for  cooperation  in  the  Indo  Pacific,  the  Commission  and  the  High 
Representative for Foreign Affairs and Security Policy committed to developing Digital Partnerships with 
some  of  its  key  partners  in  the  region.52  The  Digital  Partnerships  have  an  important  trade-aspect  and 
include  Digital Trade Principles  as a key deliverable. Although non-binding in nature,  the Digital Trade 
Principles have an important political value to reflect a common understanding on key digital trade issues. 
The  principles  include,  amongst  other  things,  political  commitments  with  regard  to  digital  trade 
facilitation, data governance, consumer trust, business trust and cooperation on digital trade. Although 
the Digital Partnerships have generally been welcomed by businesses, they have also resulted in calls on 
the EU to develop binding digital trade rules.53  

iii.  EU digital trade disciplines 

Based on its experience in multilateral and bilateral negotiations on digital trade,  as well as the digital 
trade  principles  agreed  with  the  Republic  of  Korea  and  with  Singapore,  the  EU  generally  pursues 
commitments as part of its negotiations on digital trade in the areas set out in table 1.  

45 Agreement between the European Union and the European Atomic Energy Community, of the one part, and the 
United Kingdom of Great Britain and Northern Ireland, of the other part, OJ L 149, 30.4.2021, p 10–2539.  
46 European Commission, EU-New-Zealand: Text of the Agreement, https://policy.trade.ec.europa.eu 
47 European Commission, EU-Chile: Text of the Agreement, https://policy.trade.ec.europa.eu 
48 European Commission, EU-Australia agreement : documents, https://policy.trade.ec.europa.eu  
49 European Commission, EU-India agreement : documents, https://policy.trade.ec.europa.eu   
50 European Commission, EU-Indonesia agreement : documents, https://policy.trade.ec.europa.eu   
51  European  Commission,  EU  and  Japan  start  negotiations  to  include  rules  on  cross-border  data  flows  in  their 
Economic Partnership Agreement, October 2022, https://policy.trade.ec.europa.eu  
52 JOIN(2021) 24 final (16.9.2021).  
53 Borderlex, Interview: EU and Singapore need to upgrade their trade agreement, October 2022, www.borderlex.net  

10 

 
 
                                                           
Discipline 

Objective  

1.  Cross-border data flows  To  prevent  restrictions  that  limit  cross-border  data  flows  in  a 

unjustified manner. 

2.  Protection  of  personal 

data and privacy 

To  recognise  the  importance  of  the  protection  of  privacy  and 
personal data and to maintain a high-level of protection based on 
strong safeguards set out in national law. 

3.  Customs  duties  on 

electronic 
transmissions 

4.  No prior authorisation 

To  prevent  the  application  of  customs  duties  on  electronic 
transmissions. 

To prevent a requirement of prior authorisation for the delivery of 
services by electronic means. 

5.  Electronic contracts 

To facilitate the use and recognition of electronic contracts. 

6.  Electronic 

authentication 

To  facilitate  the  use  and  recognition  of  signatures  or  seals  or 
timestamps in electronic form. 

7.  Electronic invoicing 

To facilitate the use of electronic invoicing. 

8.  Transfer  or  access  to 

source code 

To not require the transfer of or access to source code of software, 
as  a  condition  for  the  import,  export,  distribution,  sale  or  use  of 
software. 

9.  Online consumer trust 

To  ensure  a  high  level  of  protection  of  consumers  engaging  in  e-
commerce  transactions  and  to  provide  the  same  protections  for 
online consumers as for any other consumer. 

10. Open government data  To  recognise  the  benefits  of  making  government  information 
available to the public and to agree on promoting certain approaches 
such as to release the data in a machine-readable format.  

11. Unsolicited commercial 
electronic messages   

12. Cooperation 

To adopt or maintain measures to protect users against spam. 

To exchange information on areas of mutual interest, including e.g. 
e-government, cybersecurity, and challenges for SMEs. 

13. Paperless 

trading

To  facilitate  paperless  trade  by  eliminating  paper  forms  and 
documents necessary for trade administration.  

14. Open internet access 

To recognise the benefits of certain aspects of open internet access.  

Table 1: EU digital trade disciplines 

4.  Digital trade and Singapore 

a.  Singapore’s digital economy 

11 

 
 
 
 
 
 
Singapore  is  one  of  the  most  open  and  digitised  economies  in  the  world.  In  2021,  it  had  the  world’s 
eleventh  largest  GDP  per  capita54  and  it  has  been  ranked  third  in  the  2022  World  Competitiveness 
Ranking55  and  fourth  in  the  Digital  Competitiveness  Ranking.56  Singapore  ranked  sixth  in  terms  of  ICT 
adoption and digital skills in the 2020 World Economic Forum’s Global Competitiveness Report.57  

Singapore has promoted its digital transformation and the development of a digital society through its 
2018 Smart Nation strategy.58 Singapore’s 10-year Infocomm media 2025 strategy from 2015 specifically 
aims to build on the power of data and communications and computational technologies to support digital 
transformation.59  

Singapore  has  progressively  developed  its  regulatory  framework  in  relation  to  the  digital  economy. 
Amongst  other  things,  Singapore  amended  its  Electronic  Transactions  Act  in  2010  to  provide  for  the 
security and use of electronic transactions and to implement the United Nations Convention on the Use 
of Electronic Communications in International Contracts.60 It has since then been amended in 2017 and 
2021 to also implement the UNCITRAL Model Law on Electronic Transferable Records. Singapore has taken 
significant steps to facilitate paperless trade in the framework of its electronic government strategy, and 
its Customs Act provides a basis for the establishment and operation of an electronic customs service and 
provisions for trade documents to be made, served or submitted by electronic transmission. Singapore’s 
legislation to protect personal data has been in place since 2012 and has most recently been amended in 
2020 to also include obligations with regard to data breach notification and data portability.61 In the area 
of cybersecurity, Singapore has comprehensive legislation in place since 2018.62 Singapore’s recent 2023 
Online Safety Act aims to tackle online harms and strengthen online safety for users.63  

Singapore’s digital economy has grown by 22% from 2021 to 2022 and is estimated to reach almost USD30 
billion by 2025.64 The size of the e-commerce market in Singapore grew by 4% in 2022 on a year-on-year 
basis and is expected to reach USD11 billion by 2025. Singapore had more than 3 million e-commerce 
customers  in  2021,  representing  more  than  half  of  Singapore’s  population  and  90%  of  shoppers  in 
Singapore make purchases online. 65 

In  terms  of  connectivity,  Singapore  is  a  leading  country  with  99%  of  households  having  access  to 
broadband internet in 2022. Singapore also had more than 50% outdoor nationwide coverage by 5G the 

54 The World Bank, World Bank Open Data,  https://data.worldbank.org  
55 IMD, World Competitiveness Ranking 2022, www.imd.org  
56 IMD, World Digital Competitiveness Ranking 2022, www.imd.org  
57 WEF, The Global Competitiveness Report 2020, www.weforum.org  
58 Smart Nation and Digital Government Office, Smart Nation: the way forward, 2018, www.smartnation.gov.sg  
59 Singapore Ministry of Communications and Information, Infocomm Media 2025, 2015, www.mci.gov.sg  
60 Singapore Infocomm Media Development Authority, The Electronic Transactions Act 2010, www.imda.gov.sg  
61 Personal Data Protection Commission of Singapore, Personal Data Protection Act Overview, www.pdpc.gov.sg  
62 Cybersecurity Agency of Singapore, Cybersecurity Act, www.csa.gov.sg  
63 Singapore Ministry of Communications and Information,  Online Safety (Miscellaneous Amendments) Act  Takes 
Effect on 1 February 2023, www.mci.gov.sg  
64 Google, Temasek and Bain, e-Conomy SEA 2022, 2022. https://economysea.withgoogle.com  
65  Singapore  Company  Incorporation,  Why  is  E-Commerce  in  Singapore  Experiencing  Explosive  Growth?,  2021, 
www.singaporecompanyincorporation.sg  

12 

 
 
                                                           
end of 2022. In 2022, 16% of its businesses was considered as digital performers or digital leaders in terms 
of the adoption of technologies, up from 9% in 2019.66EU-Singapore trade relations 

As set out in the September 2021 EU strategy for  cooperation in the Indo Pacific, the EU considers its 
relations in the region as a priority67 and Singapore is one of the key trading partners for the EU in the 
region. Following the commitment in the EU strategy for cooperation in the Indo Pacific, the Commission 
concluded a Digital Partnerships with Singapore on 1 February 2023. The EU-Singapore Digital Partnership 
has an important trade-aspect and includes Digital Trade Principles as a key deliverable. The EU-Singapore 
Digital Trade Principles were announced on 14 December 2022 and signed on 31 January 2023.68 The EU-
Singapore Digital Partnership is a flexible instrument that provides a basis for collaboration in the field of 
research and innovation, regulatory cooperation and collaboration in international fora on topics such as 
semiconductors  supply  chain  resilience,  5G  and  6G,  cybersecurity,  platforms,  data  and  Artificial 
Intelligence.69  

The  EU-Singapore  Digital  Trade  Principles  are  a  non-binding  instrument  that  sets  out  political 
commitments between the EU and Singapore in the area of digital trade. They cover commitments in the 
area of cross-border data flows, the protection of privacy and personal data, customs duties on electronic 
transmissions, electronic contracts, electronic authentication and trust services, the transfer of or access 
to source code, online consumer trust, unsolicited direct marketing communications, open government 
data, artificial intelligence and open internet access. The Digital Trade Principles agreed with Singapore 
demonstrate a high level of convergence with the EU’s approach to digital trade. 

The  European  Union  and  Singapore  have  also  negotiated  a  Free  Trade  Agreement  and  an  Investment 
Protection Agreement. The agreements were signed on 19 October 2018 and entered into force on 21 
November  2019.70  The  agreements  aim  to  remove  customs  duties,  to  improve  trade  for  goods  like 
electronics, food products and pharmaceuticals and services, to stimulate green growth, remove trade 
obstacles for green technology and create opportunities for environmental services, and encourage EU 
companies to invest more in Singapore, and Singaporean companies to invest more in the EU. 

The EU-Singapore free trade agreement includes limited rules in the area of digital trade. Its chapter on 
services, establishment and electronic commerce contains provisions on customs duties, the electronic 
supply  of  services,  electronic  signatures  and  regulatory  cooperation  on  electronic  commerce. 
Notwithstanding  these  provisions,  the  EU-Singapore  free  trade  agreement 
less 
comprehensive on digital trade compared to recent agreements such as the EU-UK TCA and the EU-New 
Zealand free trade agreement.  

is  significantly 

66  Singapore  Infocomm  Media  Development  Authority,  Annual  report  2021/22:  architecting  Singapore’s  digital 
future, 2002, www.imda.gov.sg  
67 JOIN(2021) 24 final (16.9.2021).  
68 European Commission, Joint statement by President von der Leyen and Prime Minister Lee on the EU-Singapore 
Digital Partnership, December 2022, https://ec.europa.eu/; European Commission, EU and Singapore launch Digital 
Partnership, February 2023, https://ec.europa.eu/    
69 European Commission, EU-Singapore Digital Partnership, https://digital-strategy.ec.europa.eu  
70 Free trade Agreement between the European Union and the Republic of Singapore, OJ L 294, 14.11.2019, p. 3–
755. 

13 

 
 
                                                           
On the basis of the EU-Singapore free trade agreement Singapore has become the EU’s largest trade and 
investment partner in Southeast Asia. More than 10.000 EU companies are registered in Singapore and 
have a strong foothold in Singapore to do business in the wider Asia-Pacific region. In 2020 the annual EU-
Singapore trade in goods and services was valued at over €90 billion in 2020. Singapore ranked globally 
as the EU’s 5th largest trade in services partner and 7th largest Foreign Direct Investment destination in 
2020. In addition, EU-Singapore trade in goods increased by 4.5% in 2021 on a year-on-year basis and the 
EU registered a trade surplus of €11.7 billion in 2021 (11th largest globally).71 

b.  Singapore’s approach to digital trade 

i.  Multilateral digital trade rules 

Singapore has become a key player in the development of digital trade rules, both globally and at regional 
and  bilateral  level.  At  multilateral  level,  Singapore  is  one  of  the  three  co-convenors  of  the  WTO  Joint 
Statement Initiative on e-commerce (together with Australia and Japan)  and is an active participant in 
these  negotiations.72  As  part  of  the  WTO  e-commerce  negotiations,  Singapore  submitted  in  2019  an 
ambitious  proposal  covering  rules  on  paperless  trade,  customs  duties  on  electronic  transmissions, 
domestic  electronic  transactions  frameworks,  electronic  authentication  and  electronic  signatures, 
electronic invoicing, electronic transferrable records, cross-border transfers of information by electronic 
means, location of computing facilities, access to and use of the internet for e-commerce, source code, 
unsolicited  commercial  electronic  messages,  personal  information  protection  and  online  consumer 
protection.73 

ii.  Regional digital trade rules 

At regional level, Singapore is party to the Comprehensive and Progressive Agreement for Trans-Pacific 
Partnership (CPTPP) of 2018, and the Agreement on Electronic Commerce of the Association of Southeast 
Asian Nations (ASEAN) that was signed in Singapore in January 2019, and entered into force in December 
2021.74  Singapore  is  also  one  of  the  founding  parties  of  the  Digital  Economy  Partnership  Agreement 
(DEPA) between Australia, Chile and Singapore that was signed in June 2020 and entered into force in 
January 2021.75 Singapore is also participating in the ongoing negotiations for the Indo-Pacific Economic 
Framework for Prosperity (IPEF).  

iii.  Bilateral digital trade rules 

Singapore  has  also  negotiated  bilateral  agreements  on  digital  trade  with  some of  its  trading  partners, 
which  it  refers  to  as  Digital  Economy  Agreements  (DEAs).  With  the  DEAs,  Singapore  aims  to  establish 
common frameworks and rules for digital trade to enable companies in Singapore to connect digitally with 
their overseas partners more seamlessly. The agreements’ objectives are to lower the cost of operations, 

71  European  Commission,  Trade  statistics  by  trading  partner,  https://policy.trade.ec.europa.eu/analysis-and-
assessment/statistics_en   
72 World Trade Organisation, Joint Initiative on E-commerce , www.wto.org  
73 Communication from Singapore, Joint Statement Initiative on electronic commerce, April 2019, INF/ECOM/25.  
74 ASEAN agreement on electronic commerce, 2019, www.asean.org  
75  New  Zealand  Foreign  Affairs  and  Trade  Ministry,  Digital  Economy  Partnership  Agreement  (DEPA)  overview, 
www.mfat.govt.nz  

14 

 
 
                                                           
increase  business  efficiency  and  create  more  seamless  and easier  access  to overseas markets.76  More 
specifically, the DEAs aim to i) align digital rules and standards, and facilitate interoperability between 
digital systems, ii) support cross border data flows and safeguard personal data and consumer rights, and 
iii)  encourage  cooperation  between  Singapore’s  economic  partners  in  nascent  areas  such  as  digital 
identities, artificial intelligence and data innovation.  

Thus  far,  Singapore  has  concluded  three  bilateral  DEAs:  the  Singapore-Australia  Digital  Economy 
Agreement (SADEA) that entered into force on 8 December 202077, the United Kingdom-Singapore Digital 
Economy Agreement (UKSDEA) that entered into force on 14 June 202278, and the Korea-Singapore Digital 
Partnership Agreement (KSDPA) that was signed on 21 November 2022 and came into force in January 
202379. These DEAs include a number of modules including on artificial intelligence,  cross-border data 
flows, personal data protection, data innovation, digital identities, e-invoicing, fintech and e-payments, 
open government data, and paperless trade.80 Several of the DEAs are complemented by memoranda of 
understanding  or  the  exchange  of  formal  letters  that  set  out  practical  steps  for  closer  collaboration 
between partners.  

5.  Digital trade and the Republic of Korea 

a.  Republic of Korea’s digital economy 

South Korea’s economy has shown rapid growth since the 1960s, to become the tenth largest in the world 
in 2021 in terms of GDP,81 and it remains one of the fastest-growing developed countries. Since the 1980s 
South Korea has had a strong focus on high technology electronics industries, and is one of the world’s 
leading  manufacturers  of  semiconductors  and  consumer  electronics  such  as  smart  mobile  devices, 
televisions and computers.  

South  Korea  has  progressively  developed  its  digital  polices  and  regulatory  framework  for  the  digital 
economy. Amongst other things, South Korea facilitated the use of electronic documents with its Digital 
Signatures Act of 1999 and its Framework Act on Electronic Documents and Transactions of 2016.82 South 
Korea  has  taken  significant  steps  to  facilitate  paperless  trade  in  the  framework  of  its  electronic 
government strategy.83 Its Trade Automation Act, revised Customs Act, Electronic Transactions Act, and 
revised Commercial Law currently provide a basis for e.g. the circulation of electronic trade documents. 
South  Korea  has  developed  its  data  protection  laws  over  recent  years  and  its  Personal  Information 
Protection Act provides for a high level of protection. On 17 December 2021 the EU adopted a Decision 

Industry,  Singapore-Australia  Digital  Economy  Agreement  (SADEA), 

76 Singapore Ministry of Trade and Industry, What are Digital Economy Agreements (DEAs)?, www.mti.gov.sg  
77  Singapore  Ministry  of  Trade  and 
www.mti.gov.sg  
78  Singapore  Ministry  of  Trade  and  Industry,  Singapore-United  Kingdom  Digital  Economy  Agreement  (UKSDEA), 
www.mti.gov.sg  
79 Singapore Ministry of Trade and Industry, Singapore-Republic of Korea Digital Partnership Agreement (KSDPA), 
www.mti.gov.sg  
80 Supra note 75.  
81 The World Bank, World Bank Open Data,  https://data.worldbank.org/  
82 Korean Legislation Research Institute and Korean Law Translation Centre, Framework Act on Electronic Documents 
and Transactions, available at https://elaw.klri.re.kr  
83 OECD, Promoting digital innovation to deliver value to Korean citizens, available at www.oecd.org  

15 

 
 
                                                           
on  the  adequate  protection  of  personal  data  by  the Republic of Korea.84  The  Decision recognises  that 
personal  data  will  be  able  to  travel  safely  from  the  EU  to  South  Korea  to  the  benefit  of  citizens  and 
economies on both sides, without any need for further authorisations or additional tools. It recognizes 
that EU citizens benefit from strong protection under Korean law when their data is transferred to South 
Korea, including through the additional safeguards that were agreed as part of the adequacy dialogue. 
The adequacy Decision has a broad scope of application, covering both commercial operators and the 
public sector. It not only supports European business operators transferring personal data to South Korea 
as part of their commercial operations, but also facilitates regulatory cooperation between European and 
the Republic of Korea public authorities.  

In recent years, South Korea has adopted new legislation in relation to the digital economy, including an 
Artificial  Intelligence  Framework  Act,  Metaverse  Special  Act,  Cyber  Security  Framework  Act,  Digital 
Inclusion  Act  and  a  Data  Framework  Act.  As  part of  its  September  2022  Digital  Strategy  of  Korea,  the 
Korean  Government  has  committed  to  additional  actions  in  relation  to  e.g.  investing  in  new  digital 
industries and establishing a new legal framework for the digital economy and society.85  

In the 2020 World Economic Forum Global Competitiveness Report, South Korea ranked first in the world 
in  terms  of  ICT  adoption  and  tenth  in  terms  of  digital  skills.86  South  Korea  is  at  the  forefront  in  the 
development and deployment of communications technology and networks, with 99.9% of households 
having internet access according to the OECD in 2021.87  

As such, e-commerce is particularly strong in South Korea, with 97% of South Koreans between the ages 
of 20 and 39 making purchases over the internet, and an annual online shopping growth rate of 12.9%.88 
Cross-border e-commerce is also rapidly increasing, reaching 4.5 billion USD in 2021.89 The OECD’s 2019 
Digital  Government  Index  ranked  South  Korea  as  first  in  the  world  in  terms  of  adoption  of  digital 
technologies and using data in central and federal public sector authorities.90 

In 2020, as part of a package for recovery from the crisis triggered by the Covid-19 pandemic, the South 
Korean government announced a Digital New Deal, with a view to investing in the further development 
of 5G infrastructure, artificial intelligence and data, in order to promote and spread digital innovation and 
dynamism.91EU-Republic of Korea trade relations 

As set out in the September 2021 EU strategy for  cooperation in the Indo Pacific, the EU considers its 
relations in the region as a priority.92 South Korea is a strategic partner of the Union and a key partner for 
the EU in the Indo-Pacific region. Following the commitment in the EU strategy for cooperation in the Indo 

84 Commission Implementing Decision (EU) 2022/254 (24.2.2022).  
85 Korea Ministry of Science and Technology, Korea to Come up with the Roadmap of Digital ROK, Realizing the New 
York Initiative, www.msit.go.kr  
86 WEF, The Global Competitiveness Report 2020, www.weforum.org  
87 OECD, Korea country statistical profile, https://data.oecd.org  
88 Statista, E-commerce in South Korea - Statistics & Facts, www.statista.com   
89 United States Department of Commerce, South Korea – Country Commercial guide, www.trade.gov  
90 OECD, Digital Government Index, October 2020, www.oecd.org   
91  Republic  of  Korea  Ministry  of  Economy  and  Finance,  Korean  New  Deal:  National  Strategy  for  a  Great 
Transformation, July 2020, https://english.moef.go.kr  
92 JOIN(2021) 24 final (16.9.2021)  

16 

 
 
                                                           
Pacific,  the  Commission  concluded  a  Digital  Partnership  with  the  Republic  of  Korea  on  28  November 
2022.93  The  EU-Republic  of  Korea  Digital  Partnership  is  a  flexible  instrument  that  provides  a  basis  for 
collaboration  in  the  field  of  research  and  innovation,  regulatory  cooperation  and  collaboration  in 
international fora on topics such as semiconductors supply  chain resilience, 5G and 6G, cybersecurity, 
platforms, data and Artificial Intelligence.94  

The  EU-Republic  of  Korea  Digital  Partnership  has  an  important  trade-aspect  and  includes  as  a  key 
deliverable EU-Republic of Korea Digital Trade Principles that were signed on 30 November 2022.95 These 
Digital Trade Principles are a non-binding instrument that sets out political commitments between the EU 
and South Korea in the area of digital trade, similar in scope to the EU-Singapore Digital Trade Principles. 
The Digital Trade Principles agreed with the Republic of Korea demonstrate a high level of convergence 
with the EU’s approach to digital trade. 

In 2011, the EU concluded a Free Trade Agreement with the Republic of Korea, the first in the region. This 
trade  agreement has eliminated customs duties on nearly all products (98.7%), including fisheries and 
agricultural products. It has also removed non-tariff barriers to the exports of key EU products to Korea, 
such as automobiles, pharmaceuticals, electronics and chemicals. Not the least, services markets in both 
the EU and South Korea have largely opened to businesses and investors from each other. However, the 
EU-Republic of Korea free trade agreement includes very limited rules in the area of digital trade under 
the  e-commerce  section  in  the  Service  Chapter,  regarding  cooperation  on  developing  electronic 
commerce and a provision on customs duties. As such, the EU-Republic of Korea free trade agreement is 
significantly less comprehensive on digital trade compared to recent agreements such as the EU-UK TCA 
and the EU-New Zealand free trade agreement.  

South  Korea  is  the  EU's  ninth largest  export  destination  for  goods,  whereas  the  EU  is  South  Korea's 
third largest export market. Since the entry into force of the EU-Republic of Korea free trade agreement 
on 1 July 2011, bilateral trade and investment have expanded remarkably. Total bilateral trade in goods 
amounted to 107.3 billion euros in 2021, up by over 70% from 2011. Bilateral trade in services increased 
by  over  72%  between  2011  and  2020,  amounting  to  18.6  billion  euros  in  2020.The  EU  remains  South 
Korea's biggest foreign direct investor, ahead of Japan and the US. The EU and South Korea cooperate 
closely in international fora such as the WTO and the G20. 

The adequacy decision complements and supports the Free Trade Agreement between the EU and the 
Republic of Korea, and cooperation between the EU and the Republic of Korea on digital trade. 

b.  Republic of Korea’s approach to digital trade 

i.  Multilateral digital trade rules 

93 European Commission, Joint Statement by President von der Leyen and President Yoon on the EU-Republic of Korea 
Digital Partnership, November 2022, https://ec.europa.eu/   
94  European  Commission,  Republic  of  Korea  –  European  Union  Digital  Partnership,  https://digital-
strategy.ec.europa.eu  
95 European Commission, EU and Korea sign Digital Trade Principles, November 2022, https://ec.europa.eu/ 

17 

 
 
                                                           
At multilateral level, the Republic of Korea is one of the original signatories of the WTO Joint Statement 
Initiative on electronic commerce and an active participant in these negotiations. 

ii.  Regional digital trade rules 

The  Republic  of  Korea  is  a  participant  in  the  ongoing  negotiations  for  the  Indo-Pacific  Economic 
Framework for Prosperity (IPEF) that were launched in May 2022. In October 2021, DEPA Parties agreed 
to commence negotiations with the Republic of Korea to formally join DEPA.96  

iii.  Bilateral digital trade rules 

Since 1999, the Republic of Korea has concluded 18 bilateral FTAs with countries across the world,97 and 
is currently seeking to conclude further agreements.98 In terms of bilateral digital trade rules, Korea’s first 
digital trade agreement, the Korea-Singapore Digital Partnership Agreement (KSDPA) was signed on 21 
November 2022 and entered into force on 14 January 202399.  

6.  Conclusion 

Digital trade is increasing in importance globally and provides for new opportunities for businesses and 
consumers. Countries around the world are pursuing the development of digital trade rules that address 
restrictions  to  digital  trade  and  provide  a  clear  and  safe  framework  for  businesses  and  consumers  to 
engage in digital trade. It is important that like-minded partners work together to develop those rules, 
which can become global standards, in a manner that reflects their common values.  

The Indo-Pacific region is at the forefront of the development of digital trade rules and closer cooperation 
with  key  partner  countries  will  provide  new  opportunities  for  EU  businesses  and  consumers  and  will 
ensure that the EU takes part in setting global standards on digital trade.  

The  Commission  Recommendation  for  a  Council Decision to  authorise  the opening  of  negotiations  for 
digital trade disciplines with Singapore and with the Republic of Korea will enhance the deep bilateral 
relations  achieved  through  the  existing  free  trade  agreements  and  Digital  Partnerships  with  those 
countries. On the basis of the non-binding political commitments in the Digital Partnerships and Digital 
Trade Principles, the negotiations will be used to pursue binding digital trade disciplines. 

Binding digital trade disciplines will provide for legal certainty for EU businesses engaged in cross-border 
operations in both countries, and for Singaporean and South Korean operators active in the EU market. It 
will increase the opportunities for EU business in South Korea and Singapore, notably for micro, small and 
medium enterprises, and improve the investment conditions in the EU.  

The negotiations will allow the EU, Singapore and South Korea to leverage their highly performant digital 
economies and to create synergies based on their respective digital policies. The negotiations can build 

96  New  Zealand  Foreign  Affairs  and  Trade  Ministry,  Digital  Economy  Partnership  Agreement  (DEPA)  overview, 
www.mfat.govt.nz  
97 Republic of Korea Ministry of Trade, Industry and Energy, Korea’s FTA network, http://english.motie.go.kr/   
98 Korea Times, Korea seeks to sign over 10 free trade deals this year, January 2023, www.koreatimes.co.kr/   
99 Republic of Korea Ministry of Trade, Industry and Energy, Korea-Singapore Digital Partnership Agreement enters 
into force, January 2023, http://english.motie.go.kr/ ; Singapore Ministry of Trade and Industry, Singapore-Republic 
of Korea Digital Partnership Agreement (KSDPA), www.mti.gov.sg;  

18 

 
 
                                                           
on  the  high  level  of  convergence  on  digital  trade  issues  between  the  EU  and  these  two  key  partners 
reflected in the Digital Trade Principles signed with them.  

19