International Policy Coordination for Blockchain Supply Chains

Abstract

From the adoption of the shipping container to coordinated trade liberalisation, reductions in trade costs have propelled modern globalisation. In this paper we analyse the application of blockchain to reduce the trade costs of producing and coordinating trusted information along supply chains. Consumers, producers and governments increasingly demand information about the quality, characteristics and provenance of traded goods. Partially due to the risks of error and fraud, this information is costly to produce and to maintain between dispersed parties. Recent efforts have sought to overcome these costs — such as paperless trade agendas — through the application of new technologies. Our focus is on how blockchain technology can form a new decentralised economic infrastructure for supply chains by governing decentralised dynamic ledgers of information about goods as they move. We outline the potential economic consequences of blockchain supply chains before examining policy. Effective adoption faces a range of policy challenges including regulatory recognition and interoperability across jurisdictions. We pro-pose a high-level policy forum in the Asia-Pacific region to coordinate issues such as open standards and regulatory compatibility.

Keywords: Blockchain, Supply Chain Governance, International Policy Coordination, Trade Costs