World Trade Board Initiative: to increase the level of digitisation of trade
The World Trade Board has established a Working Group to champion digitisation in trade and investigate the practicalities of deploying specific digital solutions to enable growth, inclusion and sustainability.
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Despite the use of paper-based financial instruments, corporations are putting growing pressure on banks to enhance the efficiency, security, and trust of global trade value chains. Business partners are increasingly looking for ways to move toward inter-firm trade credit between importers and exporters. There is a mounting debate as to whether open account-a form of inter-firm trade credit in which goods are shipped in advance of payment-poses a threat to traditional documentary-based trade finance.
Banks acknowledge that paperless trade helps to reduce the risk of global trade through better data and increases efficiency by reducing trade transaction costs. The transition to worldwide paperless trade is likely, however, to be a gradual rather than revolutionary process: The United Nations Economic Commission for Europe (UNECE) believes that paper-based information exchange will continue to play an important role in international trade for the foreseeable future. Transitioning to paperless trade does not require abolishing paper; the goal is, rather, to allow traders and administrations to use electronic documents or paper based on the best achievable advantage.1
Following the first World Trade Symposium, the World Trade Board concluded that there is significant opportunity to educate, inform and document financial institutions and corporations on how to overcome obstacles for full deployment of electronic and Internet-based trade finance, as well about the potential of innovative technologies to enable wider connectivity across all stakeholder groups.
The “DigiTrade” working group aims to validate existing e-trade models through practical use case adoption, by vetting existing rules and recommendations and turn them into practical guidance. The results will help to identify-and close-eventual gaps in paper-to-digital implementation standards, to promote the adoption of best practices, so as to support wider connectivity across all stakeholder groups.
The working group will operate along three parallel streams (i.e., sub-groups):
- The “eLC” subgroup will selectively apply the eUCP rules to exchanging electronic letters of credit, with the objective of appreciating areas of improvement and consolidate a business practice.
- The “E-invoicing” subgroup will verify how moving to open account transactions helps companies shift from paper-intensive operations to digital trade.
- The “Blockchain in DigiTrade” subgroup will assess- from a corporate perspective- what is needed, and current impediments, to enhance awareness of the potential of blockchain technologies in trade.
Working Group Chair and Board members:
- Enrico Camerinelli
To register your interest in joining this Working Group, contributing research or being involved in discussions, contact us with your details.
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- The United Nations electronic Trade Documents (UNeDocs) Project, 2008, http://www.unece.org/fileadmin/DAM/trade/workshop/wks_capbld/unedocs_summary.pdf