Singapore has inked an agreement with the International Chamber of Commerce (ICC) and several global organisations to fuel the adoption of digital technologies in trade and commerce. The country's government has hailed the partnership as significant in its efforts to transition global trade from paper-based systems to digital platforms.
It also would yield savings in terms of time and operational cost as well as reduce propensity for fraud and human error, said ICC and Singapore government agency Infocomm Media Development Authority (IMDA) in a joint statement.
The 17 companies that signed up included manufacturer of pulp and paper products April Group, Japanese conglomerates Mitsubishi and Sumitomo, Hong Kong commodity trading company Noble Group, and Netherlands commodity trading company Trafigura Group. Singapore-owned companies including DBS Bank and PSA International also joined the partnership.
A global group representing more than 45 million companies, the ICC aims to promote international trade and responsible business conduct.
ICC's secretary-general John W.H Denton said: "Digital platforms will lower existing barriers to international trade in the coming years and enable many more businesses to participate in the new global economy. [ICC is] committed to enabling the broadest possible adoption of these digital technologies and support the development and recognition of universally accepted best practice standards for digitalisation, based on global consensus and the work being done by our partners today."
The announcement was made this week at the World Economic Forum in Davos, Switzerland, where Singapore's Minister for Communications and Information S. Iswaran spoke at the ICC Forum on "Taking Trade Digital". Noting that the Asian nation had spent the last 25 years establishing free trade agreements, he said such efforts now were expanded to include digital agreements.
Iswaran said the new partnership with ICC and the 17 organisations would establish the fundamentals to ensure trust in the digitalisation of trade, which he noted was a critical gap today. "Any effort to digitalise trade must support the multilateral rules-based system and enable interoperability," he added.
In this aspect, he said Singapore developed its TradeTrust framework to support "the trust element", so digital transactions could be conducted with confidence. The system focused on four main components, including the legal validity of digital documents, development of standards development to facilitate the interoperability and exchange of digital documents across systems, and an accreditation structure to certify technical applications that complied with relevant legislations. Underpinning the data flow was a public blockchain platform.
The development of TradeTrust is led by IMDA, alongside the Maritime Port Authority and Enterprise Singapore.
One of the first platforms built on the TradeTrust framework is ICC TradeFlow, which was jointly developed by ICC and trade tech company, Perlin, and in collaboration with IMDA, Trafigura, and DBS Bank.
A $20 million pilot trade was executed on the new platform last November with an iron ore shipment from South Africa to China. Partners involved in the pilot had made further major trade volume commitments to be executed on the platform.
Iswaran added that ICC's member base of 45 million companies potentially also could start tapping TradeFlow to conduct trade more efficiently.
The Singapore minister said: "The pilot TradeTrust saw documentation time reduced by more than half, from 45 to 20 days. Parties can now digitally map out trade instructions, track their execution, and more efficiently manage finance transactions... The more extensively companies use it, the stronger the value proposition is, because of the network effect."
Singapore earlier this week said it wrapped up negotiations with New Zealand and Chile on a digital economy pact that would cover various components, including digital identities, data flow, and artificial intelligence. The Digital Economy Partnership Agreement (DEPA) aimed to facilitate greater digital connectivity between the countries and establish multilateral rules on digital trade at the World Trade Organisation. The three nations would now work towards getting the agreement formally signed.
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