Blockchain: A game-changer for international trade?
Emmanuelle Ganne, WTO Blockchain Lead and co-author of ‘Blockchain and Distributed Ledger Technology in Trade: A Reality Check’, writes about a potential game-changer for international trade: blockchain.
Emmanuelle Ganne, lead on blockchain at the WTO, opening the recent Global Trade and Blockchain Forum
Some 60 years after the invention of the container, international trade may be undergoing a new revolution. Distributed ledger technology, colloquially termed “blockchain”, is greeted with enthusiasm by many trade aficionados as a possible solution to remove many of the inefficiencies that hinder international trade today.
“How transformative could this technology be for international trade? What is its potential and what are the challenges that come with its deployment?”
The WTO Global Trade & Blockchain Forum
The Global Trade & Blockchain Forum, organized by the WTO on 2 and 3 December 2019, explored the multiple opportunities that blockchain could create to remove frictions from international trade. Speakers through the forum stressed, however, that fulfilling blockchain’s potential will require addressing various challenges, including lack of interoperability, and developing a conducive regulatory framework.
Keynote speakers included Dr. Marwan Alzarouni, the CEO of the Dubai Blockchain Center, who shared UAE's and Dubai's strategy on blockchain, and Ms. Helen Kopman, Deputy Head of Digital Innovation & Blockchain at DG Connect at the European Commission, who presented the Commission's vision on blockchain.
Research shows that business uptake is at an early stage
The conference saw the launch of a new publication, “Blockchain & DLT in Trade: A Reality Check”, co-authored by Emmanuelle Ganne of the World Trade Organization and Deepesh Patel of Trade Finance Global. The publication provides an overview of the main projects underway in trade and blockchain, with a focus on trade finance, shipping, and the digitalization of trade documents.
The report finds that the average stage of maturity of the projects reviewed is around 2.3 on a scale of 5 (i.e. most trade-related blockchain initiatives are between the pilot and early stages of production). Based on a survey of more than 200 actors in the field, this publication discusses the key challenges that companies involved in blockchain trade-related projects are facing and discusses actions that may need to be taken to allow the technology to truly transform international trade.
New opportunities: finance, agriculture and trade facilitation
Panel discussions on the first day of the conference explored the opportunities that the technology opens in the areas of trade finance and logistics; how blockchain is used in Africa to facilitate international trade transactions; and the use of blockchain for agriculture and agricultural trade. Panellists also talked about projects aimed at improving food traceability by tracking agricultural products along the supply chain, digitalizing trade documents required for commodity trade and facilitating commodity trade finance. Also covered was the potential of the technlogy to facilitate border procedures, including customs clearance, recognition of authorized economic operators, and certification of origin.
Standards, regulation and intellectual property: navigating the risks and opportunities
The second day of the Forum started with a session that explored the linkages between trade, standards, the TBT Agreement and emerging technologies, with a particular focus on blockchain. It addressed whether blockchain and digital technologies could lower the cost of certification for MSMEs and developing countries or whether they could create new barriers, the challenges that arise as many standards are being developed in different organizations, how regulators will deal with risks, and the need for cooperation.
The following session, which focused on intellectual property, introduced the current patent landscape of blockchain-related innovations, its trends and new challenges arising, and presented a few use cases of blockchain technology in IP registration by national IP offices, and IP protection and enforcement by a private company. It showed how the industries could benefit from blockchain technology in the future.
The penultimate session focused on opportunities and challenges for strengthening the use of digital solutions, including blockchain, in developing countries and LDCs. It discussed the opportunities that blockchain opens for MSMEs, with a particular focus on Africa, and for government procurement processes. The panel also discussed the future prospects of blockchain technology in promoting trade development.
Blockchain and policy implications: where to next?
The final session of the Forum discussed the policy implications of the rise of blockchain for governments and international organizations, and presented the recommendations for policy actions that had emerged from the Global Trade & Blockchain online dialogue launched by the International Chambers of Commerce and the WTO. The key issues that were identified included interoperability/standardization, the need to promote an enabling regulatory framework, and knowledge sharing and communication. Discussions highlighted the need to facilitate a dialogue between the different stakeholders involved in international trade, to recognize e-signatures and e-documents, to work on digital identities and interoperability, and to engage more actively in awareness raising and capacity building.
To learn – and contribute – more…
To watch the sessions and download the presentations, click here. If you are involved in blockchain trade-related projects and want to join the Global Trade & Blockchain online dialogue to help shape the policy environment and ensure that blockchain works for trade, you are encouraged to visit the page and request a login!
You can also check out a great podcast with another Trade Experette, Hanna Norberg, and Fredrik Erikkson of ECIPE, here. Hanna was one of the presenters during the WTO Blockchain Forum.