Global institutions sign landmark agreement to boost trade

Posted on 27 Feb 2024 by The Manufacturer

A coalition of major global institutions has today signed a landmark agreement to advance a shared vision for the creation of a neutral, open, non-profit and inclusive digital infrastructure for trade data sharing.

The agreement is designed to break down barriers and boost inclusivity and participation by drastically reducing the time and cost associated with cross-border trade.

The Teaming Agreement, reached at the WTO’s 13th Ministerial Conference (MC-13) in Abu Dhabi, is signed by the World Economic Forum (WEF), the Institute of Export and International Trade (IOE&IT), the Tony Blair Institute for Global Change (TBI), the IOTA Foundation, TradeMark Africa, and the Global Alliance for Trade Facilitation (GATF).

The agreement builds on recent successful trials which have successfully reduced costs and process times for supply chains, and is centred around a shared desire to use digital infrastructures to break down barriers to global trade through global collaboration and enhanced open information sharing.

The need for a digitally empowered global trade ecosystem is stark. On average, a cross-border transaction requires the exchange of 36 documents and 240 copies, involving up to 30 participants and convoluted trade regulations, leading to challenges such as document loss, information discrepancies and fraud.

Implemented successfully, the economic benefits of today’s agreement will be substantial. A new digital infrastructure for global trade could reduce trade transaction costs by 80%, decrease the trade finance gap by 50%, cut cross-border processing times in some cases from 25 days to one day, and enhance SME efficiency by 35%.

The agreement comes at a time when global supply chains face an unprecedented cocktail of threats. Attacks on ships are forcing vessels to avoid the Red Sea and Suez Canal, a vital channel for global trade, while drought is also causing delays in the Panama Canal. More broadly, the prospect of a wave of populist victories in elections around the world this year could see a rise in protectionist policies. All this reinforces the need for greater information sharing and collaboration across supply chains.

Trade Logistics Information Pipeline

At the heart of the new agreement is a public global trade infrastructure known as the Trade Logistics Information Pipeline (TLIP). The TLIP platform was developed by TradeMark Africa in partnership with the IOTA Foundation, drawing from experiences implementing TLIP in Kenya and the United Kingdom.

The TLIP infrastructure utilises open-source technology to streamline information exchange in international trade and promote inclusivity and transparency along the supply chain. This allows everyone to share and consume information while maintaining control of their own data.

The open nature of TLIP enables users to:

  • Collaborate in establishing and operating an interoperable digital ecosystem for exchanging quality data across international supply chains using Distributed Ledger Technology (DLT) in an open-source environment and non-profit commercial structure.
  • Build on the TLIP infrastructure and experiences gained from implementing TLIP in Kenya and the UK to develop and enhance the solution toward a public utility infrastructure.
  • Adopt an inclusive approach for governments, development agencies, and private sector actors to introduce new applications to the ecosystem and influence its future.

TLIP has already been used successfully. The recent supply chain of flowers from Kenya to the Netherlands has demonstrated a seamless data sharing framework between farmers/growers, traders, freight forwarders and government agencies, eliminating the need for paper-based documentation to support exports, boosting integrity of documents and trust across the supply chain.

In addition, TLIP was chosen to participate in the UK government’s Ecosystem of Trust trials, integral to the 2025 UK Border Strategy. These trials conducted throughout 2021 and 2022 showcased TLIP’s ability to optimise time, cost, and decision-making processes for border agencies.

The signatories of today’s agreement will build on these successes and use the pipeline to realise its ambitions for a digitally powered global trade ecosystem.

Commenting on the agreement, Marco Forgione, Director General at The Institute of Export and International Trade, said: “We are proud to champion the creation of a neutral, inclusive digital infrastructure for trade. This partnership between key international trade organizations pools together a perfect mix of specialism, knowledge and the right balance of tech and trade experts to streamline supply chains and customs procedures.

With the Trade Logistics Information Pipeline (TLIP) framework, we expect promising outcomes, including up to 80% cost reduction, processing times cut to one day, and a 35% increase in SME efficiency. Through collaboration, we are committed to shaping a future where trade facilitation benefits societies worldwide, through the creation of a more equitable and sustainable global trade ecosystem and infrastructure.”

Frank Matsaert, Global Lead – Trade & Infrastructure, Tony Blair Institute for Global Change, added: “Re-imaging trade in the information age is imperative in making global trade work for all.  Innovating a public global digital infrastructure for trade that is inclusive and green, that this partnership aims to achieve, resonates with TBI’s core goal of reimagining how governments and states deliver services in the 21st Century”.

Tim Stekkinger, Head, TradeTech Global Initiative at the World Economic Forum said: “Exchanging information along the trade supply chain remains a real challenge. Trust and structured collaboration will be key to scaling systems and approaches that work across many countries.”

Dominik Schiener, Chairman of the Board of Directors & Co-Founder of the IOTA Foundation, commented: “The signing of the Teaming Agreement is this coalition’s promise to be a responsive institute focused on the needs of every stakeholder in the supply chain. We are ready to transform international e-commerce, but we need all public and private entities in the global trade space to help us craft the policies and frameworks of the future.”

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