February 27, 2023
March 14, 2023
The UK’s trading relationship with the European Union (EU) is back in the headlines with the Government seeking to resolve problems with the Northern Ireland Protocol and restore devolved government to Northern Ireland. But away from the politically-charged headlines, two other elements of the Government’s new trade policy could be particularly impactful, one operational and the other legislative.
These are building the first phase of the UK Single Trade Window (STW) by November 2023 and enacting the Electronic Trade Documents Bill by this Summer. If both are delivered effectively they will accelerate the Government’s trade ambitions, provide confidence to business to increase its own investment in digital trade and could position the UK as a leader in the legal framework and business processes that will underpin global trade in the 21st Century.
The UK STW, part of the Government’s 2025 Border Strategy, will, the Government says, be a “digital gateway at the UK border for traders to complete their import, export and transit obligations. Its aim is to save traders time and money by reducing the significant duplicative effort that is currently required to move goods across the UK border, and reduce barriers to entry to international trade.”
In simple terms, the STW is a single ‘front-door’ for traders to share trading documentation with HMRC and all other government departments and agencies who need it - in one place. When properly implemented, an STW streamlines regulatory and logistic processes, improves supply chain visibility and resilience, and boosts international competition in trade.
Delivering the first phase of this multi-department programme by November 2023 will be a challenge. The signs are that the Government is learning from previous mistakes. Despite being a multi department programme it has given overall responsibility to His Majesty’s Revenue and Customs (HMRC) - the leader in financial business transactions in Whitehall. And over the coming month, HMRC will be selecting its technical delivery partners, software solutions and beginning its design process.
As it begins its delivery of the STW, HMRC leadership and ministers may wish to test the programme’s thinking against the five principles of effective Civil Service delivery set out by the Cabinet Secretary, Simon Case, in his recent annual lecture. In particular, the last two principles focus on expertise and risk.
In 2020, as part of the Government’s consultation on its 2025 Border Strategy, Cognizant, the global digital services company, commissioned research to better understand the risks and opportunities civil servants saw in its delivery. 365 civil servants responded and cited a lack of skills, knowledge and expertise as one of their top two concerns. Since then the Borders and STW programmes have matured and addressed this concern. That leaves the question of delivery risk.
Faced with the need to deliver phase one of STW by November this year, HMRC will need to identify trusted delivery partners who can work with technologies that are well understood by HMRC. These partners will also need to be able to help HMRC access a growing market of digital trade solutions; something that will become increasingly important as the programme progresses beyond phase one. PUBLIC’s own research into the TradeTech sector has identified over 65 of these companies that the Government could work with.
If successful delivery of phase one of STW will provide confidence to business to increase its own investments in digital trade, then the successful passing of the Electronic Trade Documents Bill into law by the Summer will raise this confidence still further.
The Bill will make digital documentation legally recognised, reduce administration costs and make it easier for British firms to buy and sell internationally. It will reduce trade contract processing times from ten days to as little as 20 seconds, according to Trade Finance Global, and is expected to reduce financial and environmental costs as well as fraud. The measures have been broadly welcomed by the sector, including the International Chamber of Commerce.
Assuming Royal Assent by the Summer, the UK will be the first G7 country to have enacted such legislation. This will put the UK’s legal services sector in pole position to help other countries adapt the legislation to their own needs. One expert witness who recently provided evidence to the House of Lords Committee reviewing the Bill estimated the business case for digitising commercial trade documents across the 52 members of the Commonwealth to be worth £1.2 trillion.
Last year, PUBLIC published a series of articles that aimed to distil lessons learned from other Single Trade Windows in the Netherlands, Singapore and Australia. Each has adopted design approaches and business outreach measures that the UK can learn from. This includes the Netherlands adoption and iteration of common public-private data models from the beginning; or the use of the Networked Trade Platform in Singapore to foster an ecosystem of value-add applications that build on the core TradeNet platform.
There was a clear common challenge faced by these countries in their roll-out of a Single Trade Window-style system: support and adoption across the business community. Singapore particularly has taken proactive measures to address this including the launch of its SPRING agency to provide support and upskilling to businesses. The UK will face the same challenge with its own programme and should take a similarly hands-on approach.
The Government has a great opportunity to accelerate its ambitious independent trade policy. By enacting the Electronic Trade Documents Bill and delivering phase one of the Single Trade Window programme with pragmatism and pace the Government will create additional momentum for its new trade agreements with many of the World’s fastest growing economies.
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