It’s difficult to overstate the importance of trade to the global economy. Simply put, without trade, there is no global economy. The exchange of raw materials, goods, products, ideas and innovations is what enables industries to grow, companies to expand, markets to develop in size and sophistication, and societies to develop. The UAE is a clear case in point: trade has been the principal driver in the economy’s 20-fold expansion in the past 50 years.
Today, a matrix of rules, treaties and regulations govern these exchanges and despite the centrality of trade to collective prosperity they remain mired in analogue processes and legacy systems. For instance, moving a single shipment from Kenya to the Netherlands requires 36 documents.
These cumbersome procedures not only create unnecessary logjams, increasing costs and slowing delivery times, they also limit the accessibility of global supply chains to smaller nations and start-ups. This curtails development and exaggerates economic inequalities.
The UAE, however, has a new vision for global trade. We are championing an era of sustainable, inclusive and efficient supply chains powered by advanced technology, where artificial intelligence enhances stock movements and freight routes, blockchain supports cross-border payments and customs compliance, and data analytics improves risk management.
In Davos last year, the UAE partnered with the World Economic Forum to launch the TradeTech Initiative, a bold, far-reaching programme designed to promote the development and use of trade tech tools around the world. By bringing nations, policymakers, innovators and stakeholders from the logistics and banking communities together, we believe the UAE can help accelerate the delivery of a trade system that works better for every participant, large or small, developed or developing.
The programme has five initial pillars. First, the Trade Tech report, now published, offers a detailed road map for public-private collaboration to integrate trade tech tools into regional and international supply chains; a regulatory sandbox will co-design, implement and pilot cutting-edge regulatory policies to ensure proper governance and interoperability; a TradeTech incubator will support promising new trade-related tech projects and start-ups; and finally, a TradeTech forum, an annual event, will champion new technologies, advocate for greater momentum and showcase the best new applications.
The first TradeTech Forum will take place in Abu Dhabi on February 27, and will run in parallel to the 13th Ministerial Conference (MC13) of the World Trade Organisation, which the UAE is hosting between February 26-29. This will be a chance to place technology and its transformative power at the heart of discussions on the future of trade.
We already know the potential rewards. Studies suggest that among the G7 countries alone, technology can unlock an additional $7 trillion in trade value. Simply introducing e-bills of lading – digital versions of the document that lists the type, quantity, and destination of goods being carried – could save the logistics sector up to $6.5 billion a year.
The benefits go beyond numbers, though. In emerging economies and least developed countries, where the starting point is lower, the transformative power of trade tech can be limitless.
Entrepreneurs, small businesses, women-led enterprises and young people making their first forays into business face an uphill battle in trading across borders. High costs, complex bureaucracy, onerous paperwork, opaque rules, informational asymmetries, and a lack of access to capital are globally competitive products out of global markets. This stifles growth, drives up prices for consumers and strangles innovation.
The UAE is already leading on this issue. Firms like Abu Dhabi Ports are operating at the frontiers of innovation, with their Advanced Trade & Logistics Platform leveraging blockchain and big data to process millions of transactions entirely paper-free.
Abu Dhabi Customs has introduced an AI-powered smart classification system to enable importers and exporters to instantly ascertain the applicable customs duties, taxes, and restrictions. DP World Trade Finance is a fintech platform that is bridging the $1.7 trillion global trade finance gap by connecting small and medium enterprises to the credit they need.
By taking place alongside MC13, which gathers trade ministers and government officials from 166 member states, the inaugural TradeTech Forum will put these technologies and their applications in the spotlight – and start a vital conversation about supply-chain inclusivity and accessibility.
Though some of the coverage of MC13 has been pessimistic, I am extremely positive that at the conference we can agree on the possibilities of a dynamic, resilient and technologically powered trading system.
Trading across borders has remained largely static for decades, but a new future is possible – with TradeTech at its centre. I am confident the UAE will be leading this vital transformation.
