PAPERLESS TRADING

Introduction

The TPT-WG is pleased to submit the following draft issues paper for consideration by the SOM Electronic Commerce Task Force.

The purpose of the paper is to identify issues relevant to achieving the goal of paperless trading within APEC.

The TPT-WG agreed at its 8^th meeting, in September 1995, to work to achieving paperless trading in transportation and related trading sectors in the APEC region by 2005. The major barriers to the achievement of paperless trading are the various legal and institutional requirements for paper documents. The TPT-WG has collected information on this matter which is at Attachment A to this paper.

The TPT-WG has recognised that a number of these barriers exist in the related financial and commercial sectors and are therefore outside the responsibilities of the TPT-WG. The TPT-WG has sought assistance from the CTI in addressing this issue.

The TPT-WG submits that achievement of this goal would make a major contribution to the facilitation of trade in the region. Inclusion in the Leaders electronic commerce work program of activities directed to achieving this goal is worthy of consideration.

Policy Issues

As some of the identified legal and institutional barriers to paperless trading in the transportation and related trading sectors are part of the related financial and commercial systems in member economies, achieving the goal of paperless trading in this sector by 2005 will require commitment from Leaders to take action to address these barriers.

The priority area which needs to be addressed is in gaining acceptance for electronic documents, including facsimile documents, for the clearance of ships and aircraft and cargoes and the development of acceptable risk management strategies to facilitate this outcome.

Technical issues

Transport related documents, as with many other forms of documents, if transmitted electronically will require some reasonable guarantees as to authenticity. Robust encryption services to safeguard the integrity and confidentiality of electronic documents are now available and the APEC Telecommunications Working Group is presently working on the development of a public key authentication framework.

Other technical issues that may need to be addressed by appropriate bodies to achieve the goal of paperless trading in the transport sector include:

The adequacy and availability of infrastructure for the cost effective use of electronic commerce (for example, telephone lines and appropriate regulatory arrangements)

Adoption of agreed international standards relating to the transmission and content of electronic messages

The adequacy and interoperability of software for electronic commerce messages

The adequacy and competency of support from software suppliers;

The availability of cost-effective ways of transmitting electronic commerce messages to meet individual requirements (for example, the availability of reliable internet and value added network suppliers)

The introduction of effective facilities for linking EDI with other forms of electronic commerce (for example, some APEC economies are already developing Bureau facilities which can link between EDI, e-mail and e-form systems).

Legal/Commercial Issues

There do not appear to be any major legal problems associated with the use and acceptance of transportation and trade related documents in electronic form (with the exception of the Bill of Lading which has been the subject of extensive work in other fora). Many of the legal consequences of using electronic documents, including the issue of where responsibility falls in the event of a failure of an electronic transmission, can be dealt with in trading partner agreements.

Leaders may wish to consider the establishment of consultative groups within individual economies to examine the legal and commercial issues associated with the use of electronic documents in the transportation and related trading sectors to develop responses which are appropriate to the local requirements of each economy.

Frameworks, principles and other work on this issue

There is a Model Law on Electronic Commerce which provides guidance on the type of legislative provisions that could be used to give legal recognition to electronic documents. The Model Law can be obtained from the internet at http://www.un.or.at/uncitral/texts/electcom.ml-ec.htm.

The UN/EDIFACT system, which has an extensive regional and economy network of Boards, has had primary responsibility for the development of message standards and related implementation guidelines which should be adopted by member economies as the standard for EDI messages.

Other issues

Achieving the goal of paperless trading, and addressing, effectively, some of the issues raised above, may be facilitated by the establishment, in each economy, of local organisations for effective coordination of electronic commerce implementation in the transport and related trading sectors of each economy. Examples of existing organisations which undertake this role include Tradenet in Singapore, Tradegate/ECA in Australia, TradeVan in Chinese Taipei, and Tradelink in Hong Kong, China.

Questions that APEC should be asking about this issue

The TPT-WG believes the goal of achieving paperless trading in the transport and related trading sectors by the year 2005 is both worth achieving and able to be achieved. Is APEC willing to make the necessary commitment to make the goal a reality?

The massive predicted growth in the use of electronic commerce is expected to be, overwhelmingly, in the area of business to business communication. There are issues specific to that form of communication which can be resolved by government and business partnerships and investment. Is APEC willing to give priority to the development of business to business electronic commerce?

Conclusions – implications for APEC and what APEC may be able to contribute

APEC was established as a forum for economic cooperation between member economies. Economic cooperation has many dimensions, but the primary focus is on improving the ability of member economies to trade competitively in the region and in the world.

Enabling effective business to business electronic commerce by removing the legislative and institutional barriers to that form of commerce, will make a significant contribution to improving trading relationships and to the competitiveness of businesses in APEC member economies.

APEC can contribute to this by :

A commitment, at individual economy level, to put the necessary resources into removing the institutional and legal barriers to the use of electronic commerce in the transportation and related trade sectors.

Cooperation in solving the technical problems identified above, including through seeking and funding projects, under the auspices of existing APEC Working Groups which address these problems.

A commitment by Governments of member economies, which are usually the largest ‘business’ in each economy, to move to the use of electronic commerce in conducting its own activities in the transport and related trade sectors.

This page was last updated on 10 Aug, 2006