ICC, 17 firms sign agreement with IMDA to boost digital trade

Singapore

THE International Chamber of Commerce (ICC) and 17 firms from across the world have signed a cooperation agreement with the Infocomm Media Development Authority (IMDA) to boost digital trade, which could lead to wider adoption of Singapore's TradeTrust framework for linking digital trade platforms.

Signed at Davos on Wednesday alongside the World Economic Forum meeting, the agreement is part of efforts to move from the existing paper-based system to digitally enabled trade. The parties agreed to advocate and adopt open, neutral networks underpinned by global standards.

Moving towards digitalised trade requires support for the multilateral rules-based trading system, and interoperability across digital trade platforms, said Minister for Communications and Information S Iswaran at the ICC Trade Digitalisation Forum.

TradeTrust is designed for this, he added. It enables interoperability across digital trade systems, so digital documentation can be exchanged among them.

The framework's components are: legal harmonisation, so digital trade documents are legally valid across different systems; standards development to facilitate the exchange of documents; accreditation for the digital solutions used; and a set of open source codes that can integrate back-end solutions to the TradeTrust network, which is a public blockchain.

The firms signing the agreement were April, DBS Bank, Marubeni Corporation, Mastercard, Mitsubishi Corporation, Mitsui & Co, Mizuho Bank, MUFG Bank, Noble, NTT Data, PSA International, Sompo Japan Nipponkoa, Standard Chartered Bank, Sumitomo Corporation, Sumitomo Mitsui Banking Corporation, Tokio Marine and Trafigura. The ICC has 45 million institutional members across 130 countries, and its ICC TradeFlow is the first digital trade platform built on the TradeTrust framework.

The first pilot TradeTrust trade in November, using ICC TradeFlow, saw documentation time cut from 45 days to 20 days. This was Trafigura's purchase of US$20 million of iron ore from South Africa, supported by DBS Bank as Trafigura's trade finance issuing bank partner. Said Trafigura Asia-Pacific chief executive officer Tan Chin Hwee: "Working closely with government and the global trade and finance industry ecosystem, we intend to become a regular user of the ICC TradeFlow platform."

DBS group CEO Piyush Gupta said: "Among business processes, trade and trade finance continue to be the most onerous, with reams of physical paper having to move from place to place to establish authenticity and ownership." While digital technologies can tackle this, coordination from key players is needed, he added.