DAVOS: Singapore on Wednesday (Jan 22) signed an agreement marking its partnership with the International Chamber of Commerce (ICC) and 17 international corporations in accelerating the adoption of digital technologies in trade and commerce.
The deal was signed at the ICC Trade Digitalisation Forum on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland.
Mastercard, PSA International, Sumitomo Corporation and Standard Chartered are among the companies participating in the agreement.
They will partner on the development of TradeTrust, a framework aimed at facilitating the exchange of digital trade documentation on a public blockchain.
First announced last year, TradeTrust is spearheaded by the Infocomm Media Development Authority (IMDA) as well as the Maritime and Port Authority of Singapore, and is supported by Enterprise Singapore.
Announcing the agreement in Davos, Minister for Communications and Information S Iswaran said the newly forged partnership “establishes the fundamentals to imbue trust in the digitalisation of trade”.
The TradeTrust framework, he noted, supports a multilateral rules-based trading system and enables interoperability.
He cited the “legal harmonisation” provided for under the framework to prove the legal validity of digital trade documents, as well as the standards development for the exchange of digital documents across different ecosystems.
The partnership also taps on ICC’s influence and extensive network, he noted.
Headquartered in Paris, the ICC works to promote trade and represents more than 45 million companies in more than 100 countries.
One of the first platforms built on the TradeTrust framework was ICC TradeFlow, co-developed by ICC together with IMDA, trade tech firm Perlin, commodities trader Trafigura and DBS Bank.
In November last year, the first trade using ICC TradeFlow, a US$20 million shipment of iron ore between South Africa and China, was conducted.
Mr Iswaran, who is also Minister-in-charge of Trade Relations, noted this initial trade saw documentation time reduced by more than half, from 45 days to 20 days.
“Parties can digitally map out trade instructions, track their execution and more efficiently manage finance transactions,” he said, noting the “real value” generated through partnership with the private sector.
In a joint statement, ICC and IMDA said the newly forged partnership would be “a significant leap forward to shift international trade from a paper-based system to digitally enabled trade”.
“It will create enormous potential value based on time and operational cost savings combined with the greatly reduced incidence of fraud and human error,” they said.
ICC secretary-general John Denton said the move to digital platforms would lower existing barriers to international trade and enable more businesses to participate in the global economy.
“In line with ICC’s 21st-century purpose, we are committed to enabling the broadest possible adoption of these digital technologies and support the development and recognition of universally accepted best practice standards for digitalisation, based on global consensus and the work being done by our partners today,” he said.
Standard Chartered group chief executive Bill Winters said the bank saw
“tremendous opportunities to leverage digital solutions to enable faster, safer, more efficient, and transparent trade transactions across our global network”.
“Standard Chartered has a strong track record in using distributed ledger and other emerging technologies to digitise banking processes and we will continue to support initiatives such as TradeTrust to create a connected and integrated global trade system.”