LONDON – Earlier this week, an industrial valve produced in Britain flew out of Manchester – the country’s second-biggest city – and arrived at Singapore’s Changi Airport. The event made trade history.
It was the first fully digitalised cross-border movement of goods between the two countries. The entire transaction – transport, insurance and Customs formalities – was completed without resorting to even one scrap of paper.
The shipment was facilitated by an international consortium led by trade tech company LogChain, which has its headquarters in Singapore.
It used open and interoperable standards and distributed ledger technology – an infrastructure that allows simultaneous secure access to various databases worldwide – to complete an entirely paperless transaction.
Even in an age when almost everything has migrated online, this was not a small achievement.
The United Nations Conference on Trade and Developments estimates that the average Customs transaction involves 40 different documents.
So, the fact that all these formalities can now be completed fuss-free and entirely online serves as an example of the potential for trade unleashed by a pioneering UK-Singapore Digital Economy Agreement, which made it all happen.
And the implications of the new agreement go further, much beyond just encouraging better trade flows.
The latest statistics just released in London indicate that bilateral total trade between Britain and Singapore is just over £21 billion (S$35 billion).
While it is fashionable to claim that British trade continues to suffer due to the country’s withdrawal from the European Union, the reality remains that Britain’s exports to Singapore have expanded by a fifth over the past year.
More significantly, Singapore accounts for a full 40 per cent of Britain’s total trade with South-east Asia. No less than 70 per cent of British companies active in Asia are headquartered in the Lion City.
Singapore is also the third-largest foreign investor in Britain.
The combined value of Singapore’s foreign direct investments plus the stakes of Singaporean entities in British-based stock, bonds and other financial instruments amounts to £226 billion.
And, again, far from shrinking, these have registered a cumulative rise of 90 per cent since the 2016 British decision to leave the EU.
London and Singapore are the world’s second- and third-largest financial centres, after New York, and the British have high hopes about the potential of their latest Digital Economy Agreement, the first such trade deal signed by a European nation.
“This digital agreement plays to our strengths as a services superpower”, said Ms Anne-Marie Trevelyan, who negotiated the agreement for Britain and now serves as her country’s Minister of State for the Indo-Pacific region.
The British see the deal as potentially unleashing further opportunities in fintech to deliver cheaper and better financial services and products to consumers and in lawtech – technologies that support, supplement or replace traditional legal services.
The agreement between the two countries took only six months to negotiate. And the enabling British legislation allowing electronic documents to have the same legal treatment and effects came into force last week, another record time for such procedures.
But although the current agreement is aimed at simplifying trade procedures and boosting economic exchanges, it is also a pillar in a broader and expanding British-Singapore relationship.
Meeting on the margins of the Group of 20 summit hosted by India earlier this month, British Prime Minister Rishi Sunak and Singapore counterpart Lee Hsien Loong elevated the links between the two countries to the status of a “strategic partnership”, weaving into one both trade and investment Britain’s new membership in the Progressive Agreement for Trans-Pacific Partnership and decades of cooperation in defence, security, and intelligence services.
The two leaders also pledged “to contribute towards maintaining a free, open and inclusive, stable and peaceful international rules-based order” by strengthening the two countries’ capabilities through enhanced cooperation in tackling the “increasing threats and malicious activity seen in the digital and cyber domains”.
A joint high-level UK-Singapore Cyber Dialogue already took place in June, led by Mr David Koh, the head of the Cyber Security Agency of Singapore, and Mr Will Middleton, the cyber director at Britain’s Foreign Office.
Although details of the discussions are predictably scarce, officials say that the priorities of both countries are to understand the present cyber threat landscape, coordinate policies on the security of various apps and app stores used by the public, and fight the growing threat of ransomware.
An annual public service roundtable between the two countries is also envisaged, bringing together top civil servants from both countries.
And Singapore’s recently founded Digital and Intelligence Service has pledged to strengthen cooperation with its British counterparts.
Whether trade continues to expand will ultimately depend on private investors. But there is no question that what has started as a deal over the future of the digital economy will soon grow into a far-reaching strategic partnership extending to all emerging technologies, including artificial intelligence.
“This new agreement with Singapore will take us even further in delivering our priorities and ensure that, as we map the future of the world economy, we are doing so alongside our closest partners,” said Mr Sunak.
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