The bilateral Digital Economy Agreement signed by the Prime Ministers of Australia and Singapore over a video link in late March could be the first of such agreements between groups of nations, although a potential “digital iron curtain” between the US and China was looming large.
Gosper, a former chief executive of Australian trade agency AUSTRADE, has been a key driver in facilitating the agreement, which codifies interoperability between the two countries in areas such as eInvoicing, ePayments, cross border data flows and addresses emerging technologies such as Artificial Intelligence.
“The agreement builds on what was actually close to best practice through the Trans Pacific Partnership commitments on the digital economy and which were also replicated in the Singapore-Australia Free Trade Agreement,” Gosper told the webinar.
“The aim is to ensure we have the best modern rules and environment where we can respond to changing business practices and changes in technology.”
The current COVID-19 pandemic disruptions, said Gosper, were a reminder “how important it is that the international community is connected, and that collaboration is so important.”
As medium sized economies and global powers, Singapore and Australia had an important role in promoting digital trade. There were several similar agreements under discussion, both on a bilateral and “plulateral” basis with groups of countries.
But while the COVID-19 event had emphasized the importance of connectivity, Gosper said it was also threatening to create a global impasse with China which could ultimately create a counterproductive “digital Iron Curtain in the background.”
“The job of countries like Australia and Singapore is to maximize the benefits and protections of small and medium sized players,” Gosper said.
The agreement includes seven Memoranda of Understanding in areas such as trade facilitation to personal data protection. Singaporeans, for example, may use their digital identities to open Australian bank accounts and apply for visas as the identity will be recognized in the partner nation.
One of the key benefits from standardizing processes and recognizing the integrity of each country’s regime is that organizations working across both jurisdictions won’t be forced to replicate infrastructure.
This, according to the Monetary Authority of Singapore, is an “unnecessary barrier to trade that can drive up the cost of storing data for all businesses.”
“The agreement will ensure that financial institutions in Singapore and Australia can move financial data across the two jurisdictions to support their risk and business decisions,” said MAS management director Ravi Menon.
Tim Taylor, the Hong Kong-based CTO for Deutsche Bank, said the new agreement would help the financial industry because it would help create a “level playing field.”
“The ambiguity of not having a level playing field is that it breeds confusion,” Taylor told the webinar.
“Without a level playing field you also get boutique services which might fulfill a customer need, but which also undermine the industry. If you don’t have a framework in place you don’t get democratization of the service itself.”
The transfer of data between Australia and Singapore for business purposes will be enabled under the framework. It will spare corporates from the obligation of building local data storage centers as a condition for doing business.
On the Australian side, the Australian privacy act will apply when Australian data is transferred to another country.
Software firms in both countries will benefit from improved protection for source codes, as firms will not be forced to disclose or transfer their code as a condition to import, distribute or sell their products.
In terms of data protection, Australia and Singapore can exchange information — not including personal data — which relates to potential or ongoing investigations of organizations suspected of breaching data protection rules.
The COVID-19 disruptions, the webinar was told, had shown how crucial digital connectivity was to business continuity, particularly across borders.
Jeremy Deutsch, APAC vice president for Equinix, said the volume of digital traffic had grown by 30% in the last 90 days.
“We see a definite and increased requirement for connectivity as digital trade becomes a primary challenge,” said Deutsch.
He said the COVID-19 crisis had also shown that those countries which had “embraced digital platforms” in their economic models and supply chains had been better able to withstand the disruptions.
In an online poll during the webinar, 40% of participants said the COVID-19 crisis had “completely changed” the digital transformation priorities of their organization.
In the same poll, 35% said that their priorities had changed in the short term, while 25% reported no change.
Photo credit: iStockphoto/Estradaanton