Global Trade Awareness
Trade Policy 2.0
The World Trade Organization (WTO) agenda has moved forward with the entry into force of the Trade Facilitation Agreement (TFA) on 22 February 2017.
Although the WTO TFA is an agreement to streamline various administrative and legal factors affecting cross-border logistics and payments, it is also in effect the first multilateral agreement on digitally-enabled trade. It commits signatories to so-called “Single Window” electronic trade data management. This means trade data is to be standardized and will need to be entered into the system only once. This will eliminate the time, cost, tedium and error associated with repetitive manual keying and retrieval of the same data. The agreement also sets new legal requirements for national governments to employ current-generation Internet-based technology in fostering the conditions for “easier trade” and greater transparency.
Under the TFA, WTO member countries must publish online the details of their import/export procedures, accept e-payment methods, and provide electronic forms for official documentation by the parties engaged in cross-border trade. Additionally, there are provisions to expedite the clearance and release of goods, and for the development of end-to-end “single window” trade administration services.
Trade Policy 3.0
The simultaneous emergence of new methods and technologies enabling algorithmic legislation and contracting, enhanced identity management, and new types of payment, together provide government and commercial stakeholders the practical means to fast-track implementation of the TFA, and indeed to advance it towards a “Trade Policy 3.0”.
The TFA text itself makes no specific reference to the automation of trade rules, nor to algorithmic law or contracting. However it is clear that the globally distributed and legally binding algorithmic expression of a country’s tax, tariff and other trade rules, integrated with a new generation of identity and payment systems coming online, can further automate cross-border commerce administration for buyers, sellers and intermediaries.
Contracts, standards, legislation, regulations and agreements often contain computational functions (i.e. “rules”), but even when published in digital form, these are typically described only through natural language. The emergence of an Internet of Rules makes it worthwhile for these sections to be enriched with machine-readable XML mark-up of the “control variables”, together with a simple generic logic table or “dataframe” to express the procedural relations amongst them, so they are suitable for automation. Conformance with current global data interchange standards provides a convenient ontological ‘docking station’ for semantic mapping amongst diverse business sources.
This will dramatically reduce transaction cost, time, effort and compliance errors and omissions, and increase the flow of high-precision trade data within all appropriate disclosure controls. More timely and precise data is a valuable commodity for all stakeholders in market relationships.
None of this requires capital investment by end-users. So benefits can be realized in pace with market comprehension, technical interoperability and legal due diligence. These three factors, of course, do take time and a lot of effort. But the Xalgorithms community believes there are strong incentives to drive it forward, most prominently: the immediate advantages to be gained by early adopters.