Paperless Trading - Benefits to APEC
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This report, Paperless Trading: Benefits to APEC, highlights the potential direct and indirect economic benefits of the removal of mandatory requirements for paper-based documents in international trade. This report also provides evidence of firms gaining access to new opportunities to participate in cross-border supply chains, agile production processes and innovation in new product design as a result of more efficient freight movements and trade administration arrangements throughout the region.
Key Findings
The APEC goal of reducing or eliminating the requirement for mandated paper-based documents in cross-border trade has the potential to revolutionise the conduct of trade within the region. Key features of the paperless trading environment that will emerge across the region in the medium term include the following:
The removal of regulatory and institutional requirements for paper-based documents in cross-border trade is expected to create considerable efficiencies in intra-regional manufacturing supply chains. For example, a three per cent average reduction in the cost of imported items would involve gross savings of the order of US$60 billion annually when extended to total intra-APEC merchandise trade. The initiative also enhances the efficiency of an economy ’s manufacturing sector through a dramatic reduction in time taken in gaining approvals for cross-border trade.
Traders will benefit from paperless trading through reduced cost of shipping goods across borders, through lower communications charges, lower paper handling charges, fewer errors and faster receipt of payments, reduced trade finance charges and lower inventories. In the case of sugar, paperless trading technology reduced the cost by US$8 per ton, or 4.4 per cent of total value. Considerable savings also accrue to banks, insurers, carriers and governments in administering cross- border transactions.
Paperless trading will deliver substantial gains to all intra-APEC merchandise trade, rather than simply items supplied through the Internet. In this sense its impact will be more pervasive than e-commerce. Paperless trading also raises the prospect of greater participation by developing economies and small and medium sized enterprises in cross- border trade as traditional impediments (such as the cost and complexity of compliance with export/import requirements) become less important. The initiative could also lead to new markets emerging for smaller producers of perishable items as shipments are delivered faster and trade administration costs decline.
Governments with strong cross-agency coordination mechanisms are expected to make the most progress in removing these regulatory and institutional barriers to paperless trading. The key challenges to the take up of the paperless trading initiative are delays in repealing some legislation mandating the use of paper-based documents, passing domestic legislation to support electronic transactions, low levels of IT and telecommunications infrastructure in some economies and the cost and complexity of providing relevant government trade services online.