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Under
growing pressure for greater efficiency and security of
international trade, both governments and the private sector
are increasingly looking for ways to move away from a paper
based document system towards paperless information
exchange.
Paperless trade can significantly reduce the risk of global
trade through less and better data and increase efficiency
by reducing trade transaction costs. Studies estimate that
savings of eight billion dollars could be realized from an
electronically simplified document exchange system.
Cost is not the only issue. Paper-based documents are
increasingly less able to satisfy the needs of the
international trade environment in terms of efficiency and
security. The complexity of the modern supply chains, the
number of parties involved, and the speed with which the
goods are exchanged greatly increases the need for paperless
trading. Traditional information exchange through paper
documents requires the physical exchange of documents, and
repeated, manual data entry and validation procedures, all
of which incur costs and delays and allow the possibility to
error all along the way.
Therefore, countries and companies are increasingly seeing
paperless trade information exchange, which can be
understood as exchange through dematerialized, structured
trade documents, based on open and agreed standards, cross-sectoral
analysis of business process and information modeling, as a
means of enhancing their competitiveness, ensuring higher
compliance with trade procedures and performing of more
efficient risk analysis. The advanced exchange of
information and the computerized analysis of trade data
enable governments and enterprises to react faster to events
and take appropriate measures to reduce costs and risks.
Paperless trade offers substantial benefits to both
governments and the private sector, as well as to
transitional and developing economies.
For governments, paperless trade is an important instrument
to increase security, development and revenues from
international trade. It increases the security of trade
operations by providing electronic data, which are more
structured, more reliable and easier to process and use for
delivery. Administrative costs are lower and less revenue
is lost through fraud and non-compliance. Paperless trade
allows governments to reduce delays and costs at the border,
and increases their services for trade. It is a driver for
the modernization of administrations and promotes the
adoption of e-business in the national economy.
For the private sector, paperless trade can greatly
increase efficiency of supply chains and provide new
value-added services. It eliminates the operational costs
related to manual paper processing, increases the
transparency of the supply chain and the exchange of
information between the trading partners, improves trade and
finance processes and establishes collaborative processes.
Implementing paperless trade has the potential to provide
benefits to developing and transition economies, in terms of
simplified and less costly trade procedures, increased
transparency, higher compliance and higher governmental
revenues. Automation will significantly decrease the room
for discretionary subjective decisions; hence it will lower
the scope of corruption. Some landlocked and other
transition and developing economies will profit from the
development of electronic corridors, where traders can send
information required on a chain of border crossings well in
advance for better and timely analysis by the relevant
authorities.
But this does not mean that paperless trade does not
present specific challenges for developing and transition
economies. There is the digital divide between the developed
and developing countries.
Developing and transition economies also face specific
obstacles, such as lack of adequate telecommunications
infrastructure, resistance to change, lesser capacity for
implementation, a need for preceding organizational and
regulatory reform. However, as the benefits of paperless
trading have been mentioned, these obstacles need not
prevent developing and transition economies from
implementing paperless trade.
In addition, paperless trade favours the use of common
standards and helps to integrate international trade
processes and their automation. It reduces the need for
repeated data entry and reduces errors and delays. Because
it does not use papers produced from woods, it is,
therefore, environmental friendly.
The key issues for paperless trading include coordination
and harmonization of approaches to messaging, acceptance of
electronic documents in baking and financial transactions,
shipping agents and all government authorities and the
private sector.
A number of high profile paperless trading projects are
already underway, specifically in the Asia-Pacific region.
They are being initiated and led by governments and regional
organizations.
As a result of the highest level of coordination needed at
national, regional and international levels, the transition
to the worldwide paperless trade is likely to be a gradual
process, requiring active management both by the private and
public sectors. The foreseeable future's paper based means
of information exchange will continue to play an important
role in international trade.
The main issue in transition to paperless trade is,
therefore, not to abolish paper but rather to find ways that
allow traders and administrations to use electronic
documents, where they offer advantages, and to have the
possibility to fall back to paper when needed. This provides
a dual (paper and paperless) information exchange in
international trade, where trades and countries can access
paperless trade depending on their needs and technical
capabilities.
Governments should take a lead role in initiating the
transition to paperless trade. It touches upon core issues
for government's security, development, competitiveness,
revenue, technology and international cooperation. These
areas need provisions to be made at national level.
High-level commitment is needed to ensure an appropriate
legal and policy environment, which often requires a
revision of domestic legislation on such issues as
signatures in electronic transactions, admissibility of
electronic transactions as evidence in courts, the use of
non-negotiable documents and recognition of digital
certifications.
In paperless trade, electronic documents have to be
accepted by the various regulatory bodies, such as customs
and sanitary and phytosanitary agencies and the
implementation activities in the administrations concerned
have to be coordinated.
The private sector, including trade associations, must be
involved in policy and strategy formulation and
implementation. They should clearly articulate commercial
interests and work with all concerned government authorities
in a coordinated manner to avoid unnecessary duplication of
efforts. The trade associations have to enhance awareness
about the importance of paperless trading.
The introduction of paperless trade provides efficiency,
security, and competitiveness that benefit both governments
and the private sector. Therefore, establishing a favourable
national environment should be their aim through enhanced
public-private partnership. |
