ICC Centre For Digital Trade & Innovation launches Preparations for UK trade to go digital

ICC Centre For Digital Trade & Innovation launches Preparations for UK trade to go digital

The Electronic Trade Documents Bill enters Parliament this week marking one of the most significant changes to the way we trade in centuries. The Bill will remove all legal requirements for commercial trade documents to be handled on paper, generating £225 billion in efficiency savings, £25 billion in SME trade growth and £1 billion new trade finance.

The Electronic Trade Documents Bill will change the game for cross border trade transactions and finally enable companies to remove archaic paper processes and scale technology solutions across global supply chains. The Bill fits into the broader work that the UK is pioneering to encourage great eTR adoption through its FTA program and is also a cornerstone to promoting a more sustainable trading system. A digitalised system will generate real time, transparent data for decision makers.

At present, trade suffers from fragmented, unconnected systems and billions of paper documents which results in an overly complex system, unnecessary delays and high trade costs, especially for SMEs who feel the pain of inefficiency the most. This acts as an unnecessary barrier and disincentive for SMEs who are looking to trade overseas. A typical paper-based transaction can involve 27 documents and 35 government agencies causing a wait of up to three months and imposing a cost as much as £80,0001 on those involved. Today, less than 1% of bills of lading are handled in digital form with 188 countries requiring all commercial trade documents to be on paper.

With economic growth a top priority and public finances stretched in the wake of the pandemic, digitalisation offers a profound opportunity to remove trade barriers and promote greater resilience across global supply chains. The ICC Digital Standards Initiative (DSI) is expecting the momentum created under its Legal Reform Advisory Board (LRAB) to accelerate the progress of incorporating legal harmonisation into the framework of the World Trade Organization’s Joint Initiative on E-Commerce, the G20, the European Union, the Commonwealth and the African Continental Free Trade Area, to name a few. The DSI targets to secure 100 governments’ commitment to embark on this legal reform journey in the next 2 years. The UK government is successfully negotiating ground-breaking commitments through its FTA programme including the UK-Singapore Digital Economy Agreement and G7 Ministerial Commitment in 2021.

All of this requires support from industry to adopt new solutions and implement new legal, standards and rules frameworks now in place. The DSI-WTO Standards Toolkit for Cross-border Paperless Trade is now freely accessible in 8 global languages to help companies and government agencies adopt available legal and technical standards to accelerate the digitalisation of trade processes. Services launched by the C4DTI will provide critical help to companies seeking realise the benefits of these standards within a more seamless, transparent and sustainable trading system.

This progress comes as the C4DTI opens its new office based at Teesside University in Middlesborough. The office will be shared with the Institute of Export and International Trade and provides an ideal collaborative environment for academia, industry and government to catalyse projects and drive innovative and develop innovative solutions.

C4DTI has begun work with Singapore’s Infocomm Media Development Authority, the UK’s Department for Digital, Culture, Media and Sport, and the Department for International Trade to test and connect digital trade systems between Singapore and the UK, starting with electronic bills of lading. The aim is to operationalise the new UK-Singapore Digital Economy Agreement, implement international standards identified by the DSI and the WTO in the recently published Standards Toolkit for Cross-border Paperless Trade and establish a model digital trade corridor that enables more SMEs to trade at lower cost.

To help prepare the market for digitalised trade systems, C4DTI is launching a package of new services:

  1. A national campaign in partnership with Ubisecure and the Global Legal Entity Identification Foundation (GLEIF) to promote the adoption of Legal Entity Identities (LEIs), the widely recognised and standardised organisation identifier. These will enable companies to speed up due diligence checks, reduce fraud and efficiently track secure transactions of goods and finance.
  2. 2 training courses in partnership with the Institute of Export and International Trade to help companies handle digital documentation and use LEIs effectively.
  3. The C4DTI Needs Accelerator in partnership with Deloitte and Plexal, helping stimulate cross-sector innovation by working with companies to identify opportunities to solve their trade challenges and co-creating digital trade solutions.
  4. A technical assistance programme for low to middle income countries in partnership with the Centre for Applied Sustainable Transition Law (CASTL) to accelerate legal reform. The first project will work with a partner country in the ASEAN region and will be funded by FCDO.

“We know from the evidence that there are terrific economic gains to be made for trade if companies digitalise systems and remove paper but this is not something that will happen overnight. That is why the C4DTI has been established, to align efforts across government and the private sector and accelerate transformation across the trade system. Trade plays a huge role in the global economy so digitalisation is vital to establishing a more sustainable system. Real time transactional data will enable us to gather far richer, more insightful information to help us track and monitor the flow of sustainable goods and finance across the system. This is simply not possible if information is held on paper documents. – Chris Southworth, Secretary General, ICC United Kingdom