S.E.A.View

High hopes for single digital platform for Asean e-commerce

At the Asean Conference early this month, Trade and Industry Minister Lim Hng Kiang set out Singapore's vision when it assumes the chairmanship of Asean next year. Singapore's plan is to facilitate the execution of the Asean Economic Community (AEC) 2025 plan which follows through on the AEC 2015 road map.

To that end, Singapore will work closely with the other Asean members towards an Asean-wide self-certification regime and the Asean Single Window (ASW).

The ASW is a single digital facility to handle all cross-border Customs documentation. It will accelerate trade and cut down on paperwork and delays.

Another aspect that Singapore intends to focus Asean on is e-commerce, streamlining regulations to promote greater connectivity and lower barriers to entry.

Within Singapore, steps are being taken too to enhance e-commerce digitally.

Singapore recently announced its National Trade Platform (NTP), a one-stop trade information platform for Customs clearance and trade logistics as well as trade finance. The NTP replaces the TradeNet and TradeXchange platforms, which have been around since the 1980s.

Envisaged to be an open platform, the NTP also provides opportunities for innovators to develop new applications to support business needs. Clearly the NTP seeks to build on e-commerce as well as the ASW to achieve its objectives.

The appeal of the ASW to companies is that they can sell their products across borders, effortlessly clear Customs and arrange shipping to their customers Asean-wide, while tapping paperless trade financing opportunities.

Singapore's leadership in this area would fall well in line with developments in the world economy.

For instance, the World Trade Organisation's Trade Facilitation Agreement (TFA) came into force in February when it was ratified by 112 member countries including Singapore. The TFA was set up to expedite movement and clearance of goods across borders.

The United Nations Economic and Social Commission on Asia and the Pacific (Unescap) has also introduced the Framework Agreement on Facilitation of Cross Border Paperless Trade, with member countries expected to adopt it by October this year.

The Framework Agreement facilitates cross-border trade by encouraging countries to adopt electronic Customs clearance systems, as well as other electronic documents.

In the area of electronic trade financing, the United Nations Commission on International Trade Law (Uncitral) Working Group IV is working on the final stages of its draft Model Law on Electronic Transferable Records.

When this is adopted, it sets the legal framework with a high level of transactional security for electronic trade documents, most of which are documents of title such as bills of lading and letters of credit.

This has enormous impact on the financial industry and should be seen in the light of the other developments of the move towards paperless trade.

Not only governments have been moving in this direction. Chinese Internet giant Alibaba announced its e-WTP, or Electronic World Trade Platform, programme developed to allow small and large businesses and governments to conduct business as smoothly as possible. e-WTP has made great strides and has even announced that Malaysia would be its first overseas logistics hub outside China.

However, several hurdles remain. The spectre of cyber security concerns has once again reared its head.

An Asean more connected by electronic systems increases the potential for greater disruption should a breach catch the region unprepared.

This is where Singapore has committed $10 million to the Asean Cyber Capacity Programme to boost cyber security know-how within Asean. In addition, data protection laws in Asean are currently patchy, with some countries still waiting to enact such laws. More work is needed to arrive at a baseline level of protection .

Still, it is clear that all this points to a day where trade, logistics and finance could possibly be housed in one or a few linked electronic systems. This would allow seamless integration from the time a buyer makes a purchase right until when the product is delivered to them across the border.

This requires not only multi-party cooperation and facilitation, but also leadership and knowledge-sharing in generous quantities. This augurs well for companies in the digital space and it certainly will be one development that they should all keep their eyes on.

•The writer is technology partner at law firm Pinsent Masons. He was a legal adviser to the Asean Single Window project.

•S.E.A. View is a weekly column on South-east Asian affairs.

A version of this article appeared in the print edition of The Straits Times on May 25, 2017, with the headline 'High hopes for single digital platform for Asean e-commerce'. Print Edition | Subscribe