Global standards and interoperability key to making trade digitalisation work for everyone

Mon 25 Jul 2022
Posted by: Marco Forgione

Marco Forgione IOE&IT MemberCon22

MemberCon22 was the first time in two years that IOE&IT members could come together to network, create friendships and meet the Institute’s outstanding team, IOE&IT director general Marco Forgione writes

Truly nothing beats seeing members in person again, hearing first-hand about your businesses.

I was heartened to see members talking with each other about the theme of the event – the digitalisation of international trade – sharing insights about its practical implications and solutions to the challenges it poses.

From arcane to digital

Earlier this year the Institute published the Trade Data and Digitalisation report in which we identified 13 key asks of both businesses and government to make digitalisation happen, and to seize the great opportunities digitisation will bring.

We cannot ignore the importance of highlighting the digital agenda to businesses.

On one of the MemberCon22 panels, Jens Munch Lund-Nielsen, the head of global trade & supply chains at the IOTA Foundation, revealed that one business had to complete 650 documents for just one shipment.

This is clearly ludicrous as each document comes with a cost and risk of delay for businesses.

It is perverse that in the 21st century those involved in international trade have to depend on documents that date back to the 16th and 17th centuries. The requirement for a wet signature on paperwork today is absurd.

Our analysis shows that if the UK alone were to digitalise all of its trade documentation, there would be an immediate 1% increase in GDP, that’s £25bn a year.

Message to government

It was great to hear from Orlando Cantell – HMCR’s head of WTO, trade facilitation and capacity building – about the government’s 2025 Border Strategy, Single Trade Window programme and the Ecosystem of Trust pilot.

A really key and important message we want to deliver to government, following yesterday’s event, is that you cannot create a monopoly on these initiatives.

Our director of strategic projects and international development Kevin Shakespeare noted that the government’s digital systems need to be open to as wide a community of traders as possible.

Standards are key

Standards will sit at the heart of this. Once you have a global set of standards, you have interoperability which allows you to share data across nations and governments. Which is why we are involved it he Centre for Digital Trade and supporting the Digital Trade Documentation Bill.

While quantum computing is on the horizon, blockchain is today’s simple and accessible solution to the age-old Byzantine General’s problem. Distributed Ledger technology provides security and certainty around trade data.

Benefits to traders

What does digital trade mean on a practical basis?

The government is looking to establish a trusted trader programme and new border system that builds on the Trade Logistics Information Pipeline (TLIP) initiative on which we worked with IOTA Foundation in Kenya.

This programme has reduced the time it takes for a shipment in Kenya to reach the Democratic Republic of Congo from three weeks to just three days.

That’s a huge potential commercial, operational and environmental benefit to businesses.

Moral obligation

What motivates the Institute, as a charity, is that international trade is unique in its capability to transform lives, communities and nations. We’ve seen this in our work with organisations like the International Trade Centre to support MSMEs and female entrepreneurs in developing nations.

The single biggest impact you can have on the environment, for example, is to lift people out of poverty. This frees people to invest in supporting and growing communities and businesses in sustainable ways.

Currently fewer than 15% of UK businesses are involved in international trade. Time and time again it’s been shown that a business that trades internationally is more sustainable, profitable, employs more people and is more innovative.

If we can get more businesses trading internationally, the economic and social boost to the UK will be immeasurable. This is fundamental to the UK’s post-pandemic and post-Brexit recovery.

Finally, there is a moral obligation for us to engage effectively across nations and communities, and international trade enables us to do this.