Digital trade facilitation refers to the application of modern information and communication technologies (ICTs) to simplify and automate international trade procedures. It is becoming essential to maintaining trade competitiveness and enabling effective participation in cross-border e-commerce. Digital trade facilitation can also help reduce the time and cost of trading across borders, enhance transparency and accountability, and improve the resilience of supply chains in times of crisis.
Digital Trade Facilitation in Regional Trade Agreements
Regional trade agreements (RTAs) are increasingly incorporating provisions on digital trade facilitation, reflecting the growing importance of this issue for trade integration and cooperation. According to a study by the Asian Development Bank (ADB), out of 93 RTAs signed by Asia-Pacific economies between 2005 and 2019, 58 included at least one provision on digital trade facilitation. These provisions cover various aspects of digital trade facilitation, such as:
- Electronic exchange of information and documents
- Electronic authentication and signatures
- Electronic payment systems
- Paperless customs procedures
- Single window systems
- Data protection and privacy
- Cooperation on ICT standards and interoperability
The study also found that the depth and scope of digital trade facilitation provisions vary across RTAs, depending on the level of development, digital readiness, and policy priorities of the parties involved. Some RTAs have more comprehensive and ambitious provisions than others, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), which aim to establish a seamless digital environment for trade in the region.
Digital Trade Facilitation in Global Initiatives
Digital trade facilitation is also a key component of global initiatives on trade facilitation, such as the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) and the UN Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific (CPTA). The TFA, which entered into force in 2017, contains several provisions that encourage the use of ICTs for trade facilitation, such as:
- Publication and availability of information through the internet
- Acceptance of electronic copies of supporting documents
- Use of electronic single window systems
- Establishment of a national committee on trade facilitation
- Technical assistance and capacity building for developing countries
The TFA also allows for special and differential treatment for developing and least developed countries, giving them more time and flexibility to implement their commitments according to their capacities. The CPTA, which was adopted in 2016 by UNESCAP members, is a regional initiative that aims to enable paperless trade across borders by:
- Harmonizing legal frameworks for electronic transactions
- Enhancing mutual recognition of electronic data and documents
- Developing common standards and technical specifications for data exchange
- Establishing regional mechanisms for cooperation and coordination
The CPTA is open for accession by all UN members, but so far only nine countries have signed it and only four have ratified it. The CPTA also provides for technical assistance and capacity building for its parties, especially developing countries.
Digital Trade Facilitation in Different Regions
The level of implementation of digital trade facilitation measures varies across different regions and countries, depending on their economic development, digital infrastructure, institutional capacity, and policy orientation. According to the UN Global Survey on Digital and Sustainable Trade Facilitation 2021, which covers 143 economies around the world, the global average implementation rate of digital trade facilitation measures is 65%, with significant gaps between regions. The survey measures the implementation of 58 indicators related to the TFA, the CPTA, and other emerging initiatives on digital trade.
The survey results show that Europe has the highest average implementation rate (82%), followed by North America (78%), Asia-Pacific (66%), Latin America (63%), Africa (54%), and Western Asia (53%). Within each region, there are also variations among sub-regions and individual countries. For example, in Asia-Pacific, East Asia has an average implementation rate of 77%, while South Asia has only 49%.
Similarly, in Africa, North Africa has an average implementation rate of 67%, while Central Africa has only 40%.
Some of the factors that influence the implementation of digital trade facilitation measures include:
- The availability and affordability of ICT infrastructure and services
- The legal framework and institutional arrangements for electronic transactions
- The human capital and skills development for digital literacy
- The political will and leadership for digital transformation
- The regional and international cooperation and coordination for harmonization and interoperability
Conclusion
Digital trade facilitation is a key enabler of trade competitiveness and integration in the digital era. It can help reduce trade costs, increase efficiency, improve transparency, and enhance resilience. However, there are still significant challenges and gaps in the implementation of digital trade facilitation measures across regions and countries, especially in developing and least developed countries. To address these challenges and gaps, there is a need for:
- Investing in digital infrastructure and services
- Developing legal and regulatory frameworks for electronic transactions
- Building human capital and skills for digital literacy
- Strengthening political will and leadership for digital transformation
- Enhancing regional and international cooperation and coordination for harmonization and interoperability
By doing so, countries can harness the potential of digital trade facilitation to boost their trade performance and contribute to the 2030 Agenda for Sustainable Development.
