Technology & Trade Facilitation

On this episode Kellie and Belén talk with Pamela Ugaz, who is an Economic Affairs Officer at UNCTAD, about how technology has facilitated trade over the years, particularly after the COVID-19 pandemic and which is the current status of the adoption of tech-oriented measures to facilitate trade among WTO Members.

This episode complements a blog that Pamela wrote in 2020 for the TradeExperettes, “How Technology Can Help Beat COVID-19's Cross-Border Trade Disruptions.”

Kellie Kemock: Hello and welcome to the TradeExperettes Podcast. My name is Kellie Kemock and I have Belén Gracia with me today as a co-host. Hi Belén, how are you? 

Belén Gracia: Hi Kellie! I'm very excited to have this conversation with Pamela Ugaz. Pamela is an economic affairs officer at the United nations conference on trade and development (UNCTAD), and she's going to talk about how technology has facilitated trade over the years, particularly after the Covid 19 pandemic, and she will also share with us what is the current studies of the adoption of tech-oriented measures to facilitate trade among WTO members. Pamela has written a blog for us in 2020, for the TradeExperettes Blog and the blog is titled “ How Technology Can Help Beat COVID-19's Cross-Border Trade Disruptions.” 

Kellie Kemock: And it'll be really great to hear how that discussion or how that topic has evolved since 2020 into 2023 today. 

Belén Gracia: Yes! So let's jump into the conversation then. 

Kellie Kemock: Welcome to the TradeExperettes Podcast. In this episode, we are talking with Pamela Ugaz, and I'm so excited to hear about technology and an update on her blog that she published a few years back.

Pamela Ugaz: Hello Kellie, hello Belén! Thanks for having me today. 

Belén Gracia: Thank you so much, Pamela, for being with us today. And, for our listeners, Pamela Ugaz is an economic affairs officer at UNCTAD. She's an international trade lawyer with over 15 years of experience in trade policy, trade facilitation, regional integration and project management. And she collaborates with the trade facilitation section in UNCTAD since 2013, and has conducted technical assistance and capacity building projects for the implementation of the WTO Trade Facilitation Agreement, both in Africa and Latin American regions. She also conducts research on trade facilitation topics. Prior to joining UNCTAD, she worked as an associate economic affairs officer at the United Nations Economic Commission for Europe, and as a legal affairs officer at the World Trade Organization. Pamela is from Peru and as a legal advisor to the Vice Minister of Foreign Trade of Peru she negotiated transparency and dispute settlement provisions in several regional trade agreements between Peru and its trade partners, including the European Union, China, the US, Singapore, Japan, Korea, Canada, and EFTA. Pamela has a PhD in international trade law from the University of Geneva and a master in international law from the Graduate Institute of International Development Studies. 

 And before starting this conversation, it is important to clarify that the analysis and thoughts that Pamela will share with us in this podcast episode, are her personal opinions and do not reflect the views of UNCTAD, nor of its member states. 

Thank you so much, Pamela, for being with us today.

Pamela Ugaz: Thank you for the kind invitation to the podcast. I am really excited! 

Kellie Kemock: Great. Well, if we wanted to get started, maybe Pamela, if you could tell us a little bit about your path in trade and how you have accomplished all of those things that Belén just read. 

Pamela Ugaz: Yeah. Thank you so much, Kellie. Well, actually I am passionate about building capacity in developing countries and to overcome the trade challenges. And that is why I have spent the last 16 years of my career helping them. And also I think that coming from a developing country taught me from very early in my career that motivation, resources and opportunities are out there, however, sometimes it's very difficult then to meet. So I think that international trade could be an engine to match these opportunities with these resources and the motivation. And actually, this is the main reason why I have moved from the private law practice to the intergovernmental and governmental field. And I was very lucky to have many opportunities to do it. The first one was with the government of Peru, where I was a negotiator of free trade agreements, and then in other international organizations, mainly with UNCTAD I had the chance to collaborate with many stakeholders from the public and the private sector in developing and least developed countries to streamline trade procedures. So I have been very lucky to have all these opportunities.

Belén Gracia: That's great! And, Pamela, you wrote a blog for the TradeExperettes in 2020 that is titled “How Technology Can Help Beat COVID-19's Cross-Border Trade Disruptions,” and in this blog you explore how tech related trade facilitation measures where helping border agencies at that time in developing countries to safeguard public health, while also increasing cross-border trade efficiency. You wrote this blog at the beginning of the Covid 19 pandemic in 2020, and now almost three years later, what is your analysis on how things have changed in terms of the adoption of tech-oriented measures to actually facilitate trade among WTO members? And if you can also say something about which technologies are countries applying in the field of trade facilitation right now? 

Pamela Ugaz: Thank you so much, Belén, for the question. And actually, things have evolved in a positive way. Despite the negative impact of the pandemic on global trade, we have seen a positive progress in implementation of digital trade facilitation measures. For example, the latest UN global survey on digital and sustainable trade facilitation that was released last year in 2022 showed that the overall implementation of trade facilitation measures has increased in 5% points from 2019, before the pandemic, to 2021. And what is really noteworthy is that the implementation of trade facilitation digital measures in 144 countries stands at 64%, which is really very high. This survey has been conducted since 2015, and this is the highest rate that has reached the digital trade Facilitation measures implementation.

So technology can play a very critical role, not only in the recovery, but also in building resilience in developing countries. For example, some areas where we have seen this development is in the use of paperless trade or electronic documentation. So many countries are now increasingly using ePhyto certificates, electronic certificates of origin, they accept the digital version of many documents that before were paper-based. Another important development is also custom automation, that allows for faster and more efficient clearance of goods and also the development of many single windows. Actually the pandemic has accelerated the creation, but also the improvement of these single windows. 

Now, about which technologies are being used? There are many, but I think that maybe the three that are the most important and that can have a very broad impact, the first one is blockchain. I'm sure that you have heard about blockchain, is this possibility to make available a copy, a digital copy, to all the stakeholders in a very updated and secure manner. And blockchain can be used in the case of trade facilitation in different ways, but the most important is that it increases supply chain transparency and traceability. For example, the United Nations Economic Commission for Europe is implementing a project that is called the Sustainable Pledge. And this blockchain project has been piloted in 21 countries. And it gives the visibility end to end in the textile and leather industry, so that all the stakeholders across the supply chain can know exactly from and where any piece of clothing is going and the origin.

Also, another important technology is artificial intelligence. Artificial intelligence allows us to process and interpret data, big data, and the algorithm recognizes a pattern and makes decisions based on this. So, for example, artificial intelligence is broadly used in risk management, to improve profiling or also the segmentation of clients. Many customs around the world, for example, in Brazil, are implementing artificial intelligence in risk management. And according to the World Custom Organization, 45% percent of customs around the world are using big data or artificial intelligence for risk management.

Another, and this is the third and the last one, technology that is important also is the Internet of Things. Is these sensors that are located in containers, or objects and that send and receive information through the internet. It's being broadly used in supply chain, and for example, for trade facilitation, it allows us to track the cargos. Also, it helps us with risk management or, for example, in handling containers at port. And, this allows more efficiency and transparency across the supply chain. So these are some examples of the most frequent and maybe the most disruptive technologies that are now being used in trade facilitation.

Kellie Kemock: You mentioned the electronic single window, and that's one of the measures that is prescribed by the WTO Trade Facilitation Agreement, but can you explain a little bit more what the electronic single window for trade consists of, and maybe what are the challenges that countries face, especially developing countries, when trying to implement single window or other digital trade facilitation measures. 

Pamela Ugaz: Yeah, actually, I had the chance to help developing countries in the implementation of electronic single windows. And what is basically is a digital platform where stakeholders, such as traders, can upload information, and documentation in one entry point and at once so that it will allow them to fulfill all the export, import, or transit regulatory requirements.

And the beauty of this is that once it is uploaded in this digital platform, it will be distributed, the data, to different agencies so that they can process the information and issue, for example, certificates or licenses, depending on what is necessary for the trade transaction. So the impact of the electronic single window is huge because it allows us to process information in a digital way, faster, and also avoid the traders visiting different agencies. And now they can do everything online, even the payments. And, that is why the WTO Trade Facilitation Agreement encourages members to implement the single window in Article 10.4.

About the challenges for the implementation of the single window, and actually the challenge for the implementation of any digital trade facilitation measure are quite similar. If we see the WTO trade facilitation database, single window and also digital measures, have the lowest implementation rate among the 36 measures of the WTO Trade Facilitation Agreement. And if we look at the data on which measures have required technical assistance and capacity building, we also can see that single window is within the top five measures where developing countries and least developed countries have requested capacity building. So, it is a measure where countries face many challenges, and the main, I will say from my experience, is the lack of legal and regulatory framework to enable the electronic transaction and also the equivalence between paper-based documentation and electronic documentation. The survey that I mentioned before, the UN Global Survey for Digital and Sustainable Trade Facilitation, indicates that only 30% of 144 countries have a legal framework in place for single windows or for electronic transactions. But it's really low considering that now we are living in the digital world. 

The other challenge for developing countries is the lack of infrastructure. Internet bandwidth is very low in developing countries. And, also, availability of softwares, And computers and the tools that are necessary for digital trade facilitation measures. Also lack of expertise of the people working in the single window, but also, from the private sector side. And it is very closely related to the difficulties to engage stakeholders, to engage the private sector, the customs officers. There is always a resistance to change, and unfortunately, single window is no exception.

And, the last one and very important is also interoperability. The possibility that, even if we go to paperless and digital solutions and digital versions of the documentation, the fact that the connection between different agencies, even in a country, could be very difficult because they use different systems. And if we talk about countries it is even more difficult because the national single window of one country may not use the same technology and have the same data language that other countries. So it's very difficult to interconnect these two, for example, national single windows, if we are talking at a regional level.

So these are some of the main challenges that developing countries and least developed countries face when implementing single window or digital trade facilitation measures. 

Belén Gracia: And Pamela, can you perhaps give us a concrete example of one of the countries that you have worked with, and what challenges has that country faced, and how the project that you were coordinated helped that country overcome or draw a path towards overcoming those challenges?

Pamela Ugaz: Well, I could mention the case of Jamaica electronics single window for trade, that is implemented with UNCTAD support through the ASYCUDA Programme and, in this project, I was leading the legal gap analysis and helping Jamaica to build the legal framework that will enable the single window that now is operational. So, what are the challenges? But also, I will say the opportunities for Jamaica were many. The fact that we were working in the single window allowed us to first assess what are the legal grounds for the trade procedures, and we have a very thorough review of all the regulation, the legislation, and there were some pieces that had to be changed because now everything will be digital. Finding these kinds of legislative pieces and requirements helped the single window process and also the countries to streamline procedures and eliminate these kinds of requirements.

Another important step that was taken is that the team conducted business process analysis, and looking at the procedures, it was very clear where the bottlenecks were located, so it allowed the government to eliminate these bottlenecks before digitalizing the procedure, what is really great because you do two things in one, you first simplify and also the legal analysis was important here because at the moment of the simplification you have to corroborate what are the legal grounds of a specific requirement, and in some cases actually there was none, or there was not necessary, and it was cut off from the procedure. And once the simplification process was done, another important step was to engage all the agencies, the regulatory border agencies, and for this, a platform, for example, as the trade facilitation task force in Jamaica, that is the National Trade Facilitation Committee in the country played a very important role to facilitate the dialogue between the public and the private sector, and also to raise awareness, political will, and leverage the support from the private sector because at the end, the private sector are the ones trading, and benefit more from the single window. So the fact that we had this platform, this public private platform helped a lot in streamlining and also to overcome the resistance to change.

And, finally, in the case of Jamaica, we also prepared an umbrella single window law that enabled all the specific legal tools that were necessary for the correct operationalization of the single window. This is the experience of Jamaica, that now is in the process of bringing more border agencies on board the single window.

Kellie Kemock: To hear a specific example like that was really interesting, cuz too often I just hear generalities. And then to hear a story about how you actually implemented this in a country, I think it's really great. And you mentioned interoperability as an important factor in trade facilitation as well. And I found that interesting because too often people forget that every export is an import, you know, and every import was exported from another country, there's always that reciprocation of data. And, can you expand a little bit more about interoperability and how maybe countries are overcoming that challenge? 

Pamela Ugaz: Yes. And actually interoperability should be the final objective of any digital trade facilitation reform because otherwise, what we are doing is only transferring paper-based data into digital data. And that's all. And why is interoperability important? Because it allows that, for example, two platforms or two systems communicate between each other and transfer data that can be processed. Without this interconnection, traders will be obliged to submit digital information in one national single window, and the trader will need to submit again the same data in the other national single window of the country where maybe they will be exporting. So, interoperability allows us to simplify and streamline procedures in cross border trade. 

Now, what is important for interoperability is that, first there should be a regulatory framework, we need a framework where two countries cooperate and exchange data, but it is also very important to have standards and harmonize the procedures, because if both systems don't speak the same language, it's very difficult for them to understand each other. For example, we have many international organizations such as the WCO and also the United Nations center for trade Facilitation and electronic business that work in these standards.

Belén Gracia: And you mentioned that interoperability is the final objective of any trade facilitation reform, right? But I think it is also very interesting to consider that you need to take interoperability into account from the beginning, not only to address their regulatory part, but also in light of the technology that the countries are going to be using for the single window, so that the technology that that country is going to use can be compatible with the technology used by other countries, and can create that interoperability in itself. 

Pamela Ugaz: Exactly. And also, it is very crucial for regional integration. And it was especially [00:24:00] important during the pandemic, because many countries had to go on lockdowns very fast, there was no time actually to prepare for the pandemic. And, many regional initiatives that had to be accelerated. For example, in the Pacific Alliance, that is composed of Chile, Colombia, Mexico, Peru, during the pandemic, they implemented the transfer of electronic certificates of origin. And also in the case of Central America between Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, started the exchange of electronic customs declaration and a preferential certificate of origin. And for this interpretability was key. I mean, to have, as you mention Belén, the basis of this interoperability in place made possible to implement, accomplish this regional integration of data.

Belén Gracia: Yes, indeed. I remember from my time as director of trade policy with MERCOSUR Countries in Argentina, that in the MERCOSUR we started to have conversations about how to implement single windows and how to achieve interoperability, between the single windows that each country was going to implement and also how to try to harmonize it and achieve the same with the single window used by the countries in the Pacific Alliance. So I think it is a very relevant topic for regional integration, Either in a costume union, like Mercosur, or in a free trade area, like the Pacific Alliance, but the relevance is perhaps bigger when we are aiming at regional integration between, for example the whole Latin American region, or at least between MERCOSUR and the Pacific Alliance. And it's also a topic that countries in the European Union are actually analyzing right now with the single window that the EU is trying to implement as well.

Kellie Kemock: I find this super interesting because in the private sector where I'm at, we have companies that have multiple systems that don't talk to each other. So we're seeing this interoperability issue on a micro scale within a particular company. I'm presenting today to my team about these low code options where you don't need coders, to change what comes out of one system, you can do data normalization, meaning, if it comes out in one way, you can move it all around in a different format that then can be uploaded into the next system. So we're kind of building these bridges between the systems on a micro level. And it just got me to think, I just was envisioning a world where we could scale that up and really use that data normalization automation for this interoperability. Because too often, you know, the communication between the systems doesn't work because we're working with two archaic systems that weren't built to talk to each other. And that's probably the scenario when we're talking about technology that countries use around the world. So, super interesting and I didn't realize that I could equate interoperability with, you know, my consulting work. So thanks for that. 

Pamela Ugaz: And actually, Kellie, this is going even beyond, I mean, that will be the next step in digital trade facilitation. Because, for example, now countries are working for the interoperability between the agencies and regional hubs, but I know that some countries, they are even thinking about how the traders can make their systems interoperable with the single window, so that the information flows directly from the traders to the different agencies and they have all the information also available, to really make every stakeholder in the supply chain interact with each other in the same system, using the same language. So, I think that that will be the next step in the case of digital trade facilitation.

Kellie Kemock: It's also really great to look at the silver lining where you highlighted some benefits that actually occurred due to the pandemic. Innovation is the mother of necessity. And that's exactly what I think you were explaining, is that we needed some sort of way to continue throughout the pandemic. Do you have any other ideas or suggestions, maybe how countries could build resilience? So that we can continue the innovation and continue to move forward without too much disruption from these crises?

Pamela Ugaz: Yeah, thank you. I think that the pandemic has left very important lessons learned to all of us, including developing and least developed countries. And, we cannot repeat the same mistakes, and we need to be prepared for future crises, because there will be more crises, unfortunately, and we need to be prepared for that. So how developing countries could be better prepared is, first, increasing cooperation among themselves. Developing countries, for example, need to promote the cross border data flows so that they can be prepared and then interoperability can work. 

Also, promoting partnerships with the private sector is very important because as I mentioned at the end, traders are the ones that use these systems and know what are the challenges, but they also have the solutions for that, they may have proposals, and include the private sector in the discussion allows to leverage support and resources for the implementation of digital trade facilitation measures that can be quite expensive. And in this regard, for example, the National Trade Facilitation Committees could be the perfect platform for Dialogue between traders and the government.

Another important, action that could be taken is building digital infrastructure, and it goes along also in building the capacity, the digital skills of professionals in the public sector and in private companies to use these digital solutions, and ensure that they use standards that are harmonized, so that they can interact with other systems in cross-border trade. 

And, enhancing the regulatory framework, making sure that the legal framework for electronic transactions is in place, because it will guarantee that the electronic documents have the same value and are recognized as the paper documentation.

It is very important to have crisis management or resilience plans. It was actually a surprise that when the pandemic came countries did not have any emergency plan for the disruptions of the supply chain and cross border trade because we never imagined that lockdowns and completely shut down of many services that are important for international trade could happen. Now we know that it's possible and we need to have emergency plans. In many countries, for example, they created special crisis groups, and they didn't look at the national trade facilitation committees that were in place already, or for example, they didn't have a checklist or a specific plan of what are the steps to follow in case of a disruption in cross border trade, even a directory of the people working in customs or in different agencies that they could reach in case of an emergency. So for example, in UNCTAD, we have worked with many developing countries, the last two years in assessing what was the reaction to the pandemic and to take from that the lessons learned and also the best practices. And we have helped them to elaborate these crisis management plans. 

And finally, I would like just to mention that one measure that has had a lot of impact and it's actually quite easy to implement depending on the country, of course, is transparency. Transparency has a big impact because it gives predictability to the traders. And during the pandemic, many traders, we interviewed many stakeholders, the fact that they didn't know what was going on, what were the special regimes applied during the pandemic, made their life harder. So transparency is a measure that has a lot of impact, especially when you are managing a crisis. And this is one of the lessons learned, and one of the points that should be included in any resilience plan for developing countries. So these are only some recommendations that I have seen from the experience of working with developing countries during the last three years. 

Belén Gracia: This was very instructive and a fascinating conversation. 

Kellie Kemock: Yes, absolutely wonderful. Thank you for sharing your insights, Pamela, I feel like I always learn so much when I talk with you, so thank you. 

Pamela Ugaz: Thank you so much for, for the kind invitation and actually there are more uses of digital tra facilitation measures that we couldn't uncover, but for sure you will hear about that. For example, digital or paperless trade could also have a big impact in the mitigation of climate change. Different UN commissions and also UNCTAD is looking at the potential of single windows, for example, in the reduction of greenhouse gasses. There is a study that mentioned, for example, that in the case of Vanuatu, since the implementation of the single window, there is a decrease of 95% in the use of paper, and this is equivalent to approximately 5,000 kilograms of CO2 emissions, and also it reduced by 80% the trip between customs and other agencies. So, it also has a big environmental impact and this is something that we just started to explore, but for sure you will, in the near future, hear more about the impact of digital trade facilitation in mitigating climate change.

Belén Gracia: Wow. There we have food for thought for another conversation. 

Kellie Kemock: Yes. I never would've thought that big of an impact. Thanks for giving those stats too. That's amazing.

Pamela Ugaz: Thank you so much for having me today and it was a pleasure to talk to you. 

Belén Gracia: It was a pleasure as well. Thank you!

Kellie Kemock: The TradeExperettes Podcast is hosted by me, Kellie Kemock… 

Belén Gracia: and by me Belén Gracia, and I'm also the executive producer. 

Kellie Kemock: If you would like to know more about the TradeExperettes, you can find us online at tradeexperettes.org, on LinkedIn and Twitter. Join us!