Doubling our exports with zeros…and ones!

Image credit: Gerd Altmann, Pixabay

The development of written language in the ancient world didn’t start with great poetry or literary epics. The catalyst for writing was the need to record the transfer of the ownership of goods from one person to another. Scribes did this by marking tablets of clay with a stylus.

In the 21^st century international trade is still governed by conventions transferring the title to goods, but now any given shipment can be accompanied by as many as 30 documents, making for great complexity and the possibility for error as paper invariably goes astray. It’s time we found a better way…

Going digital

Now here’s an idea: what if we replaced paper with data? This would remove the need for costly and time-consuming documentation to accompany goods as the move through supply chains, across borders and finally to the end consumer. End-to-end trusted and secure paperless trade, supported by standardised methods for data sharing, can move goods more quickly, fund and pay for them more efficiently and provide information required by regulators and consumers alike.  It’s a win-win solution – meeting regulatory requirements, transferring ownership and title, and meeting growing demands for traceability, sustainability, food safety and consumer protection.

Seeing double

The Government has announced its ambition to double the value of trade over the next ten years. Moving to adopt end-to-end trusted and secure paperless trade systems could make a strong contribution to achieving this goal, potentially comparable to that obtained from a free trade agreement. Replacing paper with data-driven systems would not only save huge amounts of time and money, it would increase security and transparency, reduce fraud and ensure supply chains are more robust and resilient. It will also set the platform for future export growth.

The paper(less) chase

It is such a good idea you might wonder why it has not been done already. Well, it has – at least in some places. New Zealand is not amongst the global leaders when it comes to paperless trade and is in danger of falling behind some of its key trade partners, including Australia, the United Kingdom and Singapore. Admittedly the current global framework for paperless trade is fragmented and disjointed but there are paths we can follow.

The United Kingdom enacted significant legislative and regulatory reform when it passed theUK Electronic Trade Documents Act in September 2023. The Act is viewed as a landmark legal and commercial development that will boost the use of electronic trade documents, particularly electronic bills of lading, in global trade. Amongst its key principles is the commitment that certain electronic trade documents, especially e-bills of lading, are accorded the same legal status as their paper equivalent.

Australia’s Simplified Trade System is closely aligned with the changes in Britain. It aims to adopt the UN’s Model Law on Electronic Transferable Records (MLETR), which will be enacted through legislation by 30 June 2026. Modernisation of Customs procedures and the simplification and digitisation of processes is underway, with benefits for businesses and government agencies. Australia is also embracing a whole-of-government approach.

Getting our zeroes and ones aligned

So – what should we do here? For a start, the Government, working together with business, should adopt a National Paperless Trade Strategy with a similar whole-of-government approach. This will require legislative amendments, enabling exporters to achieve the significant efficiencies and financial benefits offered by paperless exchange.

Our existing trade agreements, like the Digital Economy Partnership Agreement (DEPA), already provide a basis for moving forward.  We should explore deeper digital partnerships with key trade partners like Australia, the UK, and Singapore, looking for “early harvest” outcomes by working on digital trials, including e-invoices, e-bills of lading and other commercial documents.  The APEC Business Advisory Council (ABAC) also has a number of useful projects underway.

It’s time to put away the stylus and old ways of doing this. Change is coming and the sooner we start, the better.

This post was prepared by NZIBF Project Manager, Glen Candy. NZIBF’s Digital Trade Working Group has developed detailed recommendations for the Government and NZIBF is in the process of putting these to Ministers.

Image credit: Trade Finance Global