The Philippines has acceded to the United Nations Economic and Social Commission for Asia and the Pacific (Unescap) Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific on December 23, 2019, in New York, making it the first Asean member-country to do so.
Designed as an inclusive instrument accessible to countries at all levels of development to develop their capacity to engage in cross-border paperless trade, the final treaty text was adopted by Unescap in May 2016.
It is expected to provide countries in Asia and the Pacific with a new tool and “digital” complement to better implement the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) and the development of cross-border e-commerce.
Trade cost reductions expected from full implementation of cross-border paperless trade are estimated at 10 percent to 30 percent of existing transactions costs, depending on the current state of paperless trade development in the participating countries.
Significant benefits in terms of trade compliance are also expected. Based on the Unescap report, titled “Digital and Sustainable Trade Facilitation in Asean,” implementation of cross-border paperless trade, together with the WTO TFA, is expected to help the Philippines cut trade costs by at least 10 percent, boosting its competitiveness.
Trade cost savings could increase further should Philippines trade partners also join in the initiative.
Other benefits of the framework agreement include ready access to potential counterpart countries for negotiation on cross-border data exchange, thus avoiding numerous bilateral approaches and reducing the work involved in preparing bilateral, or subregional arrangements, and improving paperless trade readiness at national level.
It also provides the opportunity to make national paperless trade practices interoperable and become better prepared to engage in cross-border trade data exchange, in particular through structured and regular sharing of lessons.