South Korea and Singapore have entered into a significant agreement to enhance collaboration in trade and nuclear power, marked by a joint declaration exchanged between the ministers of trade from both nations during a summit involving their national leaders. This initiative arises from President Lee Jae-myung's official visit and aims to upgrade the existing Free Trade Agreement (FTA), originally signed in 2006. As they approach the 20th anniversary of the FTA, both countries are committed to modernizing the agreement to incorporate contemporary trade principles and adapt to current market dynamics.

In the trade sector, South Korea and Singapore plan to develop concrete cooperation strategies, particularly in the bio-pharmaceutical area to strengthen supply chain resilience. They also intend to advance partnerships in green economy initiatives, particularly focusing on decarbonization efforts and facilitating smoother market access for South Korean firms in ASEAN markets. Furthermore, customs procedures are expected to improve, significantly enhancing trade facilitation between the two nations.

Particularly noteworthy is the agreement on small modular reactors (SMR), with the Korea Hydro & Nuclear Power (KHNP) entering into a Memorandum of Understanding (MOU) with Singapore’s Energy Market Authority. This MOU signifies a pivotal step in nuclear cooperation, as it is the first of its kind between a South Korean nuclear firm and a Singaporean government agency. Given Singapore's unique geographic constraints and high population density, SMRs are viewed as viable solutions to meet their energy demands efficiently and sustainably, as the Singapore government continues to invest heavily in energy transition projects as part of their long-term energy strategies.