New agreement on digital trade between the EU and South Korea
Published
The European Commission has completed negotiations with South Korea on a digital trade agreement. The Commission’s negotiating mandate was adopted during the Swedish Presidency of the Council of the EU in 2023. The agreement helps to promote trade between the EU and South Korea and benefits Swedish companies and Swedish consumers.
“It’s extremely gratifying that negotiations with South Korea have been successful. Conditions for Swedish and European companies trading with South Korea will now improve. For example, provisions on the recognition of digital signatures and prohibition of local data retention requirements are being introduced in the agreement. The agreement will also benefit consumers in Sweden, the EU and South Korea by improving consumer protection for e-commerce. This is a concrete step forward for the EU’s free trade agenda and an important signal at a time of increased protectionism,” says Minister for International Development Cooperation and Foreign Trade Benjamin Dousa.
The agreement complements the EU’s and South Korea’s 2011 free trade agreement with modern and binding rules on digital trade. These rules aim to increase transparency and predictability for businesses, promote a secure on-line environment for consumers and counteract digital trade barriers. Examples of such provisions include the recognition of digital signatures, consumer protection for e-commerce and bans on requirements for local data retention. The agreement thereby strengthens and promotes bilateral trade.
Digital trade has risen sharply in recent years and now accounts for around 25 per cent of total global trade. The EU is the world’s largest exporter and importer of services that can be provided digitally. The agreement contributes to diversifying the EU’s trade relationships and strengthening the Union’s competitiveness and role in world trade.
“The agreement is the culmination of Swedish efforts during its EU presidency in 2023 when we prioritised digital trade and pushed for the EU to open negotiations,” adds Mr Dousa.
About the agreement’s structure and content
The agreement’s structure and content is similar to a previous agreement on digital trade reached with Singapore. The contents of the agreement also share several similarities with the chapters on digital trade included in the EU’s more recent trade agreements, for example with the United Kingdom.
The agreement contains a large number of binding rules. To improve transparency and security, the agreement also includes rules regarding the recognition of digital signatures and e-contracts. Digital trade barriers are counteracted with rules prohibiting local data retention and tariffs on electronic transfers, which include services that are provided digitally. To promote a secure on-line environment, there are rules on consumer protection for e-commerce. The agreement also contains a collaboration on regulatory development related to digital trade. Finally, the agreement brings together sections of the existing free trade agreement with South Korea that relates to areas such as dispute resolution, institutional structures and preferential rules.
The agreement is significant for the EU, especially as more than half of the EU’s services exports are provided digitally. Together with the comparable agreement with Singapore, the South Korea agreement is a concrete example of progress for the EU’s trade agenda. The agreements are a step on the road to modernising EU trade policy and they strengthen the ties between dynamic trading partners.
About Sweden’s trade with South Korea
In terms of Sweden’s bilateral trade, South Korea is its second largest trading partner in Asia by trade in goods. South Korea is also Sweden’s fourth largest export market in Asia. In 2023, Sweden’s exports of goods to South Korea totalled SEK 21 billion, while exports of services amounted to SEK 6 billion. Motor vehicles, machinery, pharmaceutical products and electronics are among the main export goods . Between 2018 and 2023, goods exports to South Korea increased 43 per cent.
South Korea is also Sweden’s fourth largest source of imports in Asia in terms of both goods and services. In 2023, Sweden imported goods from South Korea worth SEK 16 billion and services amounting to SEK 4 billion. A total of around 700 people work for South Korean companies in Sweden. Swedish companies have a strong presence in South Korea, with SEK 21 billion in direct investment assets and approximately 9 000 employees in the country.
Press contact
Press Secretary to Minister for International Development Cooperation and Foreign Trade Benjamin Dousa
Phone (switchboard) +46 8 405 10 00
Mobile +46 76 133 67 90
email to Linn Laurin
