The UK has today joined a groundbreaking agreement which is designed to grow the economy by boosting global digital trade.
After five years of negotiations, the UK and 90 other countries have finalised the E-Commerce Joint Initiative at the World Trade Organization (WTO), which will make trade faster, cheaper, fairer and more secure. It will help British businesses, workers and consumers seize the opportunities of global digital trade, which is estimated by the OECD to be worth around £4 trillion and growing.
Once implemented, the agreement will commit all participants to the digitalisation of customs documents and processes. This will in many cases end the need to print forms off and hand them over at customs – a slow, expensive and old-fashioned way of working.
The signatories to this agreement will also commit to recognising e-documents and e-signatures, reducing the need for businesses to physically sign contracts and post them around the world.
Global adoption of digital customs systems, processes and documents would increase UK GDP by up to £24.2 billion in 2023 UK GDP terms. Even partial adoption could represent a significant boost to UK GDP.
It also commits signatories to putting in place legal safeguards against online fraudsters and misleading claims about products.
Business and Trade Secretary Jonathan Reynolds said:
We are proud to play our part in securing the first ever global digital trade agreement, cutting costs for business and delivering on this government’s ambition to deliver economic growth.
Britain is back and proudly playing her role as an outward looking trading nation. Global digital trade is already estimated by the OECD to be worth around £4 trillion and counting but no common set of global rules exist. This is a huge step forward in correcting that and ensuring British businesses feel the benefit.
Science Secretary Peter Kyle said:
This global agreement aims to help people use technology safely by protecting them from fraud, while driving economic growth through the digitalisation of trade so it’s faster and more secure.
We will leave no stone unturned in our work to share the benefits of technology and drive economic growth by working with partners around the world to achieve this.
For a UK financial services provider, doing business in any of the participating countries will require far fewer paper contracts and invoices, or manual signatures or authentication, as these will be replaced with their electronic equivalents.
Chris Southworth, Secretary General, International Chambers of Commerce UK said:
Businesses and economies thrive when there is one common set of rules. The E-Commerce Agreement is a major breakthrough and an excellent reminder of the power of international collaboration. It creates the environment we need to drive innovation as we transition away from archaic paper-based processes and into the modern world of data and technology.
It is an opportunity to accelerate efforts to digitalise our borders and global supply chains, and help to remove unnecessary friction and costs that prevent SMEs from trading. This is good news for business, consumers and the economy.
Matt Hammerstein, Head of Barclays UK Corporate Bank said:
As co-chair of the Trade Digitisation Taskforce with ICC United Kingdom, we have worked closely with the Government to support efforts to secure the competitiveness of UK exports, champion the digitalisation of trade at scale and continue to work on streamlining processes related to fraud and financial crime risk.
We welcome this announcement, which will help make the trade process easier for small, medium and large-sized businesses in the UK by removing paper-based barriers to trade. Barclays stands ready to play its part in supporting the success of British exports.
Reaching this agreement is part of the government’s commitment to rebuild and strengthen global partnerships and stand up for the rules-based international order. It is an important step in modernising the global trade rulebook and furthering cooperation in the World Trade Organization.
Not only will the E-Commerce Joint Initiative deliver new growth opportunities for the UK, it also recognises the importance of supporting developing and least-developed countries, to ensure growth and prosperity for all.
Attention now turns to working with WTO partners to incorporate the agreement into the WTO legal framework. Once incorporated, UK ratification will take place.
