Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific

Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific

Date: 
Monday, March 11, 2019
Type: 
Public information and advocacy materials
Abstract

On 19 May 2016, the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific was adopted as a UN treaty. The adoption was a result of dedicated and progressive efforts of a diverse group of more than 25 Asia-Pacific economies, who were engaged in four years of intensive consultations and negotiations. It is now open to 53 members of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

The Framework Agreement is fully dedicated to the digitalization of trade processes, aiming to enable the exchange and mutual recognition of trade-related data and documents in electronic form among national and subregional paperless trade systems. Trade digitalization, or the simplification and digitalization of international trade procedures, will help the Asia-Pacific region harness international trade for sustainable development. Indeed, moving from paper to electronic data and information exchange is expected to make international trade easier, more transparent, more efficient and, hence, more inclusive and less taxing on the environment.

Trade digitalization offers a great opportunity to reduce trade costs and increase trade volume for the region. Through paperless trade and seamless electronic exchange of trade data and documents, countries can enhance their competitiveness in global markets and increase their participation in global value chains. Enabling cross-border paperless trade together with full digital implementation of the WTO Trade Facilitation Agreement (TFA) could decrease trade cost by more than 25%, cutting international transaction costs in Asia and the Pacific by about $0.6 trillion annually[1]. Annual export of the region could also expand by about $250 billion[2].

Despite existing efforts and initiatives, the region’s progress towards trade digitalization have been challenging. In particular, the UN Global Survey on Digital and Sustainable Trade Facilitation reveals that the average implementation rate of cross-border paperless trade measures stands at less than 25%, compared to more than 50% for most other types of trade facilitation measures[3]. In order to move forward on trade digitalization across the region, there is a need to: (1) harmonize technical and legal standards that apply to electronic trade data and documents; (2) reduce capacity gaps among countries in the region; (3) enhance collaboration between public and private sectors; and (4) establish a strong intergovernmental platform for coordination mechanisms among countries in the region.

Recognizing these potential benefits and challenges, the Framework Agreement has started and will continue to support the region’s efforts by providing a dedicated institutional framework for countries with proven political will to develop legal and technical solutions for trade digitalization.

The Framework Agreement brings significant benefits to the region by providing a region-wide multilateral intergovernmental platform, where the neutral and dedicated space needed for development and testing of legal and technical solutions for cross-border paperless trade is provided. It builds upon existing national, bilateral and subregional initiatives, and also helping to achieve the full digital implementation of the WTO TFA.

The Framework also provides inclusive access to knowledge and capacity building opportunities, by allowing committed countries to fully participation in the Framework Agreement regardless of their digital or trade facilitation readiness, helping them to develop realistic action plans, and supporting their implementation through pilot projects and training activities.

All ESCAP members are welcome to join this forward-looking Framework Agreement, as they prepare to cope with the fourth Industrial Revolution and strive to more effectively engage in the digital economy. The more countries work together to achieve cross-border trade digitalization, the more international trade will become efficient and transparent, which is essential for ensuring that trade fully contributes to inclusive and sustainable development.

1. United Nations, Economic and Social Commission for Asia and the Pacific (ESCAP) (2017). Digital trade facilitation in Asia and the Pacific. Studies in Trade, Investment and Innovation, No. 87. Sales No. E.18.II.F.10. Available at: https://www.unescap.org/publications/digital-trade-facilitation-asia-and...
2. ESCAP (2014). Estimating the Benefits of Cross-Border Paperless Trade. Available at: https://www.unescap.org/sites/default/files/Benefits%20of%20Cross-Border...
3. See: http://untfsurvey.org

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