In spite of decades of efforts to digitalize trade, it remains labor- and paper-intensive. Shipping a container from Mombasa to Rotterdam generates a pile of paper that is twenty-five cm. high. Around thirty actors and more than one hundred people are involved throughout the journey, with the number of interactions exceeding two hundred. The unique characteristics of blockchain make it a promising technology to remove the multiple frictions and inefficiencies that plague international trade today and that have been put into sharp focus during the COVID-19 pandemic. The potential is significant, but technology on its own can do little. Trade digitalization cannot happen in a legal and regulatory vacuum. While law and regulation are often seen as constraints or means to counter unintended consequences of technological developments, they also play a key enabling role. International legal instruments already provide useful guidance in some areas, but gaps remain to be filled and more proactive action is needed across the globe to transpose existing legal instruments into national legislation. International organizations have a key role to play to help coordinate action on these two fronts.
The existing literature shows that transparency and monitoring reduce trade costs, improve regulatory practices and build and sustain trust. In this paper, using 555 specific trade concerns (STCs) raised by the Technical Barriers to Trade (TBT) committee in the period 1995–2018, we develop a novel classification of STCs. We distinguish between STCs aiming to exchange information (transparency STCs) and those aiming to monitor compliance with the TBT agreement (monitoring STCs). We show that: (i) when STCs intend to foster transparency, they are mainly used in relation to notified measures, thus suggesting that they are used to acquire not only new but also higher quality information than that provided merely by notifications; (ii) when STCs intend to challenge the compliance of WTO members with the TBT Agreement, they primarily address draft measures, thus suggesting that they are used to promote accountability and improve good regulatory practices; and (iii) STCs raised at the draft stage are less likely to escalate to a dispute than those raised on adopted measures. Guided by these findings, we suggest the potential for some reforms to improve the efficiency of the system. These include: introducing a reporting system on the outcome of STCs; using STCs raised in committees to fill the gap of missing notifications; systematically using the STC mechanism at the stage of draft measures; and building in the dispute settlement system the requirement to raise the matter and discuss it within the relevant committee before filing a formal dispute settlement case.
Technology is not only transforming international trade, it is also pushing the boundaries of regulation. The cross-border nature of the Internet challenged existing regulatory approaches, raised new regulatory issues and gave rise to new forms of governance. Digital technologies that leverage the Internet are challenging existing approaches even further. Among those, one technology, blockchain, keeps making the headlines. A game changer for some, the most overhyped technology for others. Few technologies have sparked so much debate.Often associated with Bitcoin because it was first implemented as the technology underpinning the famous cryptocurrency, blockchain is much more than Bitcoin. 1 In fact, by making it possible for actors along the supply chain to interact on a peerto-peer basis in quasi real time and in a highly secure and trusted environment, this technology could have a major impact on many facets of international trade and deeply transform it. Blockchain could facilitate international trade transactions and help implement World Trade Organization (WTO) agreements, and it could foster the digitalization of trade.Yet, technology is only a tool. A number of regulatory issues deserve the attention of policymakers for this potential to be realized. It is therefore critical that government officials educate themselves to understand the technology, its potential, but also its limitations, and keep an eye on developments. This chapter discusses the measures that should be taken to promote the development of a regulatory * Emmanuelle Ganne is a Senior Analyst at the World Trade Organization.
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