SINGAPORE: Singapore, New Zealand and Chile are a step closer to an agreement aimed at advancing digital trade.
Trade and Industry Minister Chan Chun Sing announced on Tuesday (Jan 21) that negotiations on the Digital Economy Partnership Agreement (DEPA) have reached a substantial conclusion - meaning most of the points have been settled.
Mr Chan said the wording of the agreement would be refined, adding that the three countries were targeting for a formal signing in time for the next Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade meeting, which is expected to be in April this year.
He was speaking to reporters during a press conference in Singapore, together with New Zealand's Minister for Trade and Export Growth David Parker and Chile's Vice Minister for Trade Rodrigo Yanez.
Negotiations on DEPA began in May last year and was spearheaded by the three agencies - the Ministry for Trade and Industry (MTI), the Ministry for Communications and Information (MCI) and the Infocomm Media Development Authority (IMDA).
Mr Chan said DEPA represents a "new form of economic engagement in the digital era", noting that current trade rules and policies do not fully address the issues posed by the growth in digital trade.
The progress made so far represented the "tremendous political will" and close collaboration between the three countries, he added.
Such an agreement is needed because the digital transformation of the economy is “fundamentally changing the landscape of global trade”, said Mr Yanez.
“It’s not only relevant for the big players in Silicon Valley, but also for SMEs (small- and medium-size enterprises) and developing economies like Chile,” he said.
Mr Parker noted that DEPA was a “living agreement” that can change as circumstances change.
“The challenge for us now is to breath life into it,” he said.
In a joint statement signed on Tuesday, the three ministers said DEPA would complement other ongoing efforts such as the World Trade Organisation’s negotiations on a joint statement for e-commerce as well as digital economy work streams within APEC and other international forums.
“We also welcome other like-minded partners to participate in the DEPA,” they said.
BENEFITS OF DEPA
MTI, MCI and IMDA said the agreement "establishes new approaches and collaborations in digital trade issues, promotes interoperability between different regimes and addresses the new issues brought about by digitalisation".
Among the issues DEPA aims to address are paperless trading, electronic invoicing, online consumer protection as well as trade and investment opportunities for SMEs.
The agreement also aims to promote the adoption of ethical artificial intelligence (AI) governance frameworks, noting the increasingly widespread use of AI in the digital economy.
DEPA will allow the customs authorities of the three countries to work towards the exchange of electronic trade documents at the border, the agencies said.
They pointed to research by container shipping giant Maersk and tech firm IBM in 2014 which showed the cost of processing trade documents made up as much as 20 per cent of the cost of moving goods.
Through the agreement, the countries will also promote the use of and enable the exchange of electronic trade documents for customs clearances and business-to-business (B2B) transactions.
DEPA will also encourage countries to adopt standards, similar to the international Peppol (Pan-European Public Procurement Online) electronic invoicing framework, for their own e-invoicing systems.
This will allow for invoices to be transmitted in a structured digital format, as well as enable faster and more cost-effective payments.
Mr Tom van der Lee, the finance director for retailer Dairy Farm, said he expected DEPA - together with a greater regional adoption of e-invoicing - to reduce operating costs for the company as it would have to spend less on manually processing different invoice formats from its suppliers.
The Singapore Business Federation (SBF) said it was encouraged by the importance DEPA placed on the needs of SMEs as well as encouraging inclusivity.
“Digitalisation and interoperability of regulatory compliance and business transactions in cross-border trade will help our companies reduce both cost and time-to-market, enhancing their global competitiveness,” said SBF in a statement.
In March 2020, the inaugural CNA Digital Economy Leadership Summit 2020 will bring together some 200 key decision makers from Government, diplomatic circles and the private sector from around Asia, to explore key issues that include: How to grow and innovate in a digital economy, as well as how to manage talent and ensure sustainability in the digital economy.
More details are available at: cna.asia/leadership-summit