Global trade, valued at US$ 28 trillion annually, is the backbone of the world economy. Cross-border trade, however, is still a complex process that is majorly dependent on paper documents.
In an attempt to raise awareness of paperless documents and digital transactions by providing a uniform guideline for global businesses, in March 2022, the World Trade Organization (WTO) and the International Chamber of Commerce (ICC)’s DSI (Digital Standards Initiative) jointly published a standards toolkit for cross-border paperless trade.
The toolkit mentions the existing standards that help identify potential gaps, promote interoperability, and drive adoption. It aims to provide every participant in the supply chain with the list of widely used and most notable standards required to take trade digitalization to the next level by bringing forth the advantages of cross-border paperless trade.
Going Digital - Most Common Problems Stakeholders Face
During the publication of this toolkit, WTO & ICC stated that less than 1% of all trade documents are digitized. A typical trade transaction requires the exchange of around 36 pieces of documentation and 240 hard copies on average that can be easily misplaced or forgotten if not handled correctly throughout all the supply chain stages. Shifting to paperless trade, however, can change the situation for the better and make the process seamless.
Research by the two organizations states that one of the biggest challenges for paperless trade is the lack of awareness of the existing standards. If businesses were made aware of the widely-used standards and protocols meant for digital trade, more companies would be willing to shift their focus on the same. While WTO criticized the fragmented nature of the standards, the lack of awareness on the subject has only complicated the process.
How Does the New Standards Toolkit Change the Face of Digital Trade
Digital transformation has lowered the costs of international trade and has facilitated the global value chain coordination to connect businesses worldwide. The toolkit published by WTO & ICC acts as a comprehensive guide for the digital trade standards used to facilitate real-time data exchange and supply chain collaboration between global stakeholders and works as a universal digital language for companies.
At present, the toolkit mentions around 100 frameworks, initiatives and standards with legal entity identifiers and country codes that they can leverage for automating their process. In the document, the businesses will find the identifier standards required for naming products and trade documents along with the ISO 20022 standard and ISO 14533 standard.
The two organizations hope that this toolkit will be a step towards a digital future that will offer seamless and secure connectivity throughout the supply chain. It will create a universal digital language to communicate, track and trace objects throughout the life cycle, irrespective of the different tools they are using.
How Can Timber Exchange Add Value to Digital Trade
Timber Exchange is a SaaS-based supply chain platform that aims to automate time-consuming processes that companies have to face today in trade. Timber Exchange is a step in that direction as it deals specifically with the needs of the global forestry industry. The mission behind the platform is to digitize the global timber supply chain, automate time-consuming processes, and enhance cross-border collaboration.
It covers the entire supply chain from inquiry to delivery with four core pillars to aid the process - 100+ advanced supply chain tools, an open B2B marketplace, a constantly updated market data hub, and offline trade compliance and trade finance services. On this multilingual platform, exporters, importers, and freight forwarders can interact seamlessly with global counterparties in a virtual supply chain. To know more, book a demo with the experts.