Trade Facilitation, Digital Transformation and the Emergence of Global Trade Platforms

Abstract

The World Trade Organization Trade Facilitation Agreement that entered into force in 2017 encourages the migration of trade processes from paper to electronic form and the modernisation of trade management systems. The foundations for current progress in trade facilitation were laid during decades of work by the World Customs Organization and other standard setting bodies to promote the use of standards in trade processes. Trade facilitation efforts are taking place within a broader push toward the digital transformation of business generally, and the growing importance of platforms as a business model and network governance mechanism. There is a risk that collective action problems arising within domestic and global markets will fragment the emerging digital architecture of global markets into many separate “national single window” systems. Platforms succeed by discovering how to organize cross-subsidies among different groups of stakeholders. If a global trade platform operator were to emerge, that might mitigate the risk of fragmentation of the emerging global trade architecture but give rise to different risks.

Keywords: world trade organization, trade facilitation, digital transformation, standardization, platforms, networks