The UK is among 91 countries which have signed a digital trade agreement through the World Trade Organization (WTO), the Department for Business and Trade (DBT) has announced today (26 July).
After five years of negotiations, the E-Commerce Joint Initiative has been finalised and has produced the ‘Agreement on Electronic Commerce’.
It is hoped that the deal will boost the digitalisation of trade documents, which is intended to simplify customs processes and reduce the cost of trade.
Marco Forgione, director general of the Chartered Institute of Export & International Trade, said the agreement is “a huge step forward in modernising international trade processes”.
Removing barriers
Once implemented, the agreement will “commit all participants to the digitalisation of customs documents and processes”.
In practice, this means shifting from the ongoing use of paper forms to the recognition of e-documents and e-signatures, significantly speeding up the process of completing and sending customs documentation.
The UK’s business and trade secretary, Jonathan Reynolds, celebrated the agreement for “cutting costs for businesses” and offering a route towards a simpler, standardised system.
“Global digital trade is already estimated by the OECD to be worth around £4trn and counting but no common set of global rules exist.
“This is a huge step forward in correcting that and ensuring British businesses feel the benefit.”
‘Benefits’ for trade
Forgione welcomed the agreement, and 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 (ETDA) and the Border Target Operating Model already in place.
“As chair of the UK’s E-Commerce Trade Commission, created to encourage and support businesses to trade and export online, we know the power that digital trade has to transform the global trade landscape, saving time, money and reducing friction at the border.”
In 2023, the UK became the first G7 nation to give digital documentation the same legal footing as paperwork in trade and trade finance when ETDA entered into force.
Economic boost
DBT predicts that global adoption of digital customs systems, processes and documents will increase UK GDP by up to £24.2bn in 2023 GDP terms, and adds that any steps taken towards embracing digitalisation will be a boon for the country’s balance sheet.
Science secretary Peter Kyle said that he hoped the agreement would "help people use technology safely by protecting them from fraud, while driving economic growth through the digitalisation of trade so it’s faster and more secure."
"We will leave no stone unturned in our work to share the benefits of technology and drive economic growth by working with partners around the world to achieve this."