How to make trade single windows more efficient with blockchain

trade

(Kyle Ryan, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Alejandra Radl, Integration and Trade Specialist, Inter-American Development Bank, Fellow, Digital Trade, World Economic Forum & Jesse Lin, Project Specialist, Digital Trade, World Economic Forum


International trade is of critical importance for economic and social development worldwide. A major cost of global trade is the regulatory requirement of submitting large volumes of information to governmental authorities in order to comply with import, export and transit-related documents and certificates.

Trade single windows are flagship initiatives that reduce these administrative processes, allowing trade partners to submit standardized information at a single entry point. However, pain points and challenges – including lack of interoperability among agencies, the persistence of outdated processes, and limited visibility and traceability of shipped goods – are preventing us unleashing single windows’ full potential.

With the rise of technologies, such as the Internet of Things and artificial intelligence, new opportunities to improve efficiency, transparency and interoperability in the trade ecosystem are emerging.

 

In this context, the Integration and Trade Sector of the Inter-American Development Bank (IDB) and the World Economic Forum’s Centre for the Fourth Industrial Revolution (C4IR) partnered in 2018 to develop a unique initiative: the Global Trade Single Window with Blockchain project, as part of the Forum’s TradeTech Initiative.

We first agreed to work in the design of a policy framework to support governments across the world as they explored the potential value added of blockchain in single windows, while understanding the experimental nature surrounding this technology. The report, Windows of Opportunity: Facilitating Trade with Blockchain Technology, found that blockchain could help lower barriers to trade. And it will now assist governments in making informed decisions about how to utilize this technology, encouraging the development of pilot projects.

A collaborative work

To drive the project and develop the framework, a team of trade, customs and technology specialists from the IDB and the C4IR – and its digital trade team – has worked both remotely and through live meetings in Washington, San Francisco and Buenos Aires. Leveraging each other’s networks, we also built an expert community of over 80 members globally across various industry sectors, government agencies, intergovernmental organizations, academic institutions and civil society.

Single window pain points

While they have delivered significant gains over time, single windows have yet to be fully implemented in many countries due to these and other challenges we have identified:

Limited interoperability. Single windows duplicate efforts, add delays and increase lack of end-to-end visibility, with the subsequent time and costs for companies to engage in trade.

Persistence of paper and lack of automation. Create inefficiencies in making and reconciling databases and customs duty and fee payments.

Limited traceability of goods in supply chains. Impede agencies’ ability to verify the origin of goods, trace goods in supply chains, and detect anomalies and fraudulent patterns.

Concerns about data trustworthiness and security of commercial and financial data among companies, making them reluctant to use single windows.

Blockchain use cases

Blockchain could be a particularly useful solution, along with further complementary technologies and policy measures, to address some of the highlighted pain points. It can help stakeholders interoperate by enabling them to access the same data at the same time; smart contracts built on a blockchain can automate stakeholders’ compliance with various contractual obligations; and data on a blockchain are a stream of reliable information on past transactions, as they are immutable once entered. At the same time, the report considers the limitation of blockchain technology, and the challenges of analyzing blockchain’s potential in single windows.

Image: The European Sting

Several potential use cases were identified through the design process. Interoperability among two or more national single windows and among border agencies within a country drew most interest by the expert community.

We found that blockchain has the potential to lower trade time and costs by helping to:

· Increase interoperability: improve visibility to manage risks, recognize patterns, conduct pre-arrival processing, share data and improve user experience.

· Increase traceability: enable more complete data on shipments, supply chains and audit trails by bringing together single windows and/or private sector trade intermediaries on a common blockchain.

· Automate processes: automate payments and reconciliation to accelerate revenue collection.

· Increase the trustworthiness of data: make data immutable and provide single-window users with unique identities, enabling them to apportion relevant parts of their identities to third-party service providers.

Guidelines for using blockchain in single windows

To achieve these benefits, the report presents six key steps for incorporating blockchain into single windows:

1. Create a grand vision and make the business case, ensuring high-level political support.

2. Create a governance structure, including for data, design and implementation.

3. Build the technology architecture and integrate blockchain with existing systems.

4. Manage user identities and data, testing single, interoperable identity for single-window users.

5. Measure impact developing and track key performance indicators of single windows powered by blockchain and report on the progress and results.

6. Iterate the pilot, considering ways to improve and scale it.

Next steps

We have found that blockchain has the potential to solve various pain points facing single windows, and bring new efficiencies and capabilities to border agencies. However, benefits will hinge on the rigour of its implementation.

This framework aims to pave the way for blockchain pilots around the world. The IDB will soon be working to implement proof of concepts with governments in Latin America and the Caribbean (LAC). One objective is to build LAC governments’ capacity to understand and apply new technologies on border clearance, and to share lessons learned.

The IDB and the World Economic Forum also look to work on further technologies in border clearance, and to reap the immense and still largely latent economic gains from facilitating world trade.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Closing the gaps in accelerating women’s rights:the role of medical students

COP21 Breaking News: China has promised to cut emissions from its coal power plants by 60% by 2020

EU Commission spends billions without achieving targets

LEAGUE OF YOUNG VOTERS LAUNCHES TOOL FOR YOUNG PEOPLE TO COMPARE POLITICAL PARTIES AHEAD OF EU ELECTIONS

The vital role played by logistics during humanitarian crises

Will CETA be implemented after eight long years or it will be vetoed by the EU citizen?

A new global platform to unleash entrepreneurs on the world’s toughest problems

EP launches Caruana Galizia Prize for Journalism on anniversary of her murder

EU citizens want more competences for the EU to deal with crises like COVID-19

COP25: ‘Signals of hope’ multiplying in face of global climate crisis, insists UN chief Guterres

Canada needs to increase foreign aid flows in line with its renewed engagement

Data show EU Economy in a stubbornly subdued state

Why are so few women buying into Bitcoin?

3 cognitive biases perpetuating racism at work – and how to overcome them

The EU will always have a stable partner in Montenegro, says President Đukanović

The jobs forecast is unsettled. It’s time for a reskilling revolution

This one small change could transform education for millions

Google prepares to final EU judgement over Android antitrust case

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

6 young leaders who are improving the state of the world on International Youth Day

Human rights chief calls for international probe on Venezuela, following ‘shocking accounts of extrajudicial killings’

Protests, violence in Haiti prompts international call for ‘realistic and lasting solutions’ to crisis

UN working ‘intensively’ to stop Ebola in eastern DR Congo, following second case in major border town

Oslo leads the way in ‘Breathe Life’ campaign for cleaner cities in climate change era

Bureaucracy in the member states again the obstacle for long due strong European Hedge Funds

London is becoming the world’s first National Park City

1 in 7 people would choose not to fly because of climate change

Libyan national conference postponed, nearly 500,000 children at ‘direct risk’ from fighting around Tripoli

Industrial clusters using green hydrogen can drive clean energy transition in Europe and China

UN mobilizes in Rohingya camps to support babies born of rape; young mothers face stigma

The crucial need to prioritise palliative care in Universal Health Care

Could 2021 be a turning point for forests and climate change?

$675 million appeal to stop coronavirus in its tracks, as deaths rise

What wealth managers can learn from family dynamics

How’s Life? reveals improvements in well-being but persistent inequalities

The challenge of maintaining interest in Primary Health Care in medical students

Antitrust: Commission imposes interim measures on Broadcom in TV and modem chipset markets

Heart attacks and strokes are more common on high pollution days, data shows

Governments can fight corruption by joining the digital payment revolution

These are the benefits of learning a second language

Tax crimes: MEPs want EU financial police force and financial intelligence unit

State aid: Commission approves € 1.6 billion Polish scheme to compensate companies for damages suffered due to coronavirus outbreak and provide liquidity support

Science is ‘key’ to pushing forward the 2030 Agenda, UN development forum told

Greece to stay in the euro area but the cost to its people remains elusive

India’s future as a world power depends on 4 key relationships

Trade MEPs promise thorough scrutiny of the EU-UK agreement

How Asia could be the winner in the US and China’s Belt and Road race

Africa’s shrinking lake shows the impact of climate change on women and indigenous people

Quarantine: A mental health guide for every mood

European Commission kicks off major EU trade policy review

New Eurobarometer survey shows: The majority of Europeans think the EU should propose additional measures to address air quality problems

This mobile laundry gives homeless people free showers and washes their clothes

Italy’s dilemma after Merkel-Hollande agreed loose banking union

EU budget: Commission proposes major funding increase for stronger borders and migration

As the Universal Declaration of Human Rights turns 70 – is it time for a new approach?

UN policewoman recognized for ‘speaking up and speaking out’ on behalf of the vulnerable

Can Greece’s devastating economy deal with the migration crisis?

Afghanistan: UN envoy urges further extension of ceasefire with Taliban, as Eid ul-Fitr gets underway

The European reaction to the neo-fascist wind

Computer skills are crucial for children – in lockdown and in life

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s