The UK has joined 90 other nations in signing up to an agreement aimed at easing global digital trade barriers. Negotiated over five years and finalised at the World Trade Organisation (WTO), key provisions of the E-Commerce Joint Initiative include the digitalisation of customs documents and processes, eliminating the need for outdated and costly physical paperwork at customs. According to the UK Department for Business and Trade, the shift to digital customs systems, processes and documents will increase the country’s gross domestic product (GDP) by up to £24.2bn.
“We are proud to play our part in securing the first-ever global digital trade agreement, cutting costs for businesses and delivering on this government’s ambition to deliver economic growth,” said UK Business and Trade Secretary Jonathan Reynolds, emphasising that the E-Commerce Joint Initiative would bring rationality to a sector brimming with potential efficiencies but bereft of regulations. “Global digital trade is already estimated by the OECD to be worth around £4 trillion and counting but no common set of global rules exist.”
Digital trade agreement could unlock multi-trillion-pound market opportunity
According to the WTO, work on the Joint Initiative began in December 2017, when 71 member states agreed to initiate exploratory work on the subject. As of last month, it added, 91 members are now participating in discussions to agree on new efficiencies in global digital trade. “The co-conveners noted that COVID-19 has increased the urgency of developing global rules on digital trade,” said the WTO. “The initiative remains on track to deliver substantial progress by the 12th WTO Ministerial Conference.”
Signatories to the E-Commerce Joint Initiative will also recognise e-documents and e-signatures, reducing the necessity for physical contract signings and postal exchanges. Additionally, the agreement commits to implementing legal safeguards against online fraud and misleading product claims.
UK joins EU in signing up to streamlined digital trading
The agreement was welcomed by the UK’s Chartered Institute of Export & International Trade. “Enabling interoperability of trade is essential to ensuring digital trade processes are seamless, moving away from the archaic paper-based system into a digital-first, data-driven system which stabilises trusted secure trade,” said the institute’s director-general, Marco Forgione. “We welcome the benefits that this global digital trade agreement will hold for our members and our wider business network. The UK has already been taking great strides forward on digitalising our trading processes and is well placed to hit the ground running with this new agreement, particularly with the Electronic Trade Documents Act and the Border Target Operating Model already in place.”
The UK’s signing up to the E-Commerce Joint Initiative follows a promising few weeks for digital trade agreements globally. At the beginning of July, the digital trade agreement (DTA) between the UK and Ukraine came into force. Meanwhile last week the European Union (EU) and Singapore finalised negotiations for a Digital Trade Agreement (DTA) to set global standards for digital trade rules and cross-border data flows.
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