The House of Lords has issued its research briefing paper on the Electronic Trade Documents Bill (ETDB), legislation which is seen as a critical element underpinning the switch towards a digital-first trade system and the UK’s 2025 Border Strategy.
The briefing paper is part of legislative process and provides details of the bill, as well as weighing up the benefits and costs of its implementation. It also outlines the legislation’s progress to date, including details of parliamentary debates and a breakdown of the scrutiny it has received clause-by-clause.
A summary of stakeholder input acknowledges a report last year by the Institute of Export & International Trade (IOE&IT) and Flint, which praised the ETDB and highlighted the positive impact it would have both on UK trade and globally.
‘Golden moment’
Writing in the Financial Times, Chris Southworth, secretary general of the International Chamber of Commerce, United Kingdom (ICC), pointed to research by Santander showing that 65% of UK companies trading overseas “will remove paper as soon as laws enable them to do so.”
Southworth adds that a current trade transaction may require as many as 40 different paper-based documents, often requesting the same information time and again.
He calls on trade ministers from across the Commonwealth (gathering in London this week to consider reforms to facilitate digitalisation of trade):
“[This] is a golden moment to reform laws and digitalise trade across the Commonwealth. According to the Commonwealth’s own business case this would deliver $1.2trn in economic growth by 2026. It would also reduce trade transaction costs by 80% and enable more SMEs to participate.”
Southworth adds that, if this was combined with customs digitalisation, the $1.2tn would increase to $2tn, the Commonwealth’s trade target by 2030.
Savings
As reported by the IOE&IT Daily Update, the ICC has previously estimated that the ETDB could generate £225bn in efficiency savings, £25bn in SME trade growth and £1bn in new trade finance.
The ICC also suggested it could “provide more transparency to help businesses, consumers and governments make more informed choices on the products and suppliers they choose while making international trade.”
‘Vital’ bill
Marco Forgione, the IOE&IT’s director general, agrees. He has argued that the Bill is a “vital development” in government efforts to support UK trade, saying:
“The Bill would place electronic trading documents on the same legal footing as paper documents and enable businesses to move from paper-based to digital-based transactions.
“This will have a positive impact on the cost, duration and environmental impact of customs and border processes and improve of efficiency for trade administration costs. It is an essential part of creating a world leading border system and encouraging more trade.”
As a report in Trade Finance Global explains, there isn’t any single legal regime to unify the trade world, making the English common law system the most widely followed, which in turn increases the significance of the ETDB.
