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Releasing the full potential of global e-commerce

People inside a government lecture hall

Hosted by the United Nations Conference on Trade and Development (UNCTAD), this year’s E-Commerce Week brought together government representatives, CEOs, international organizations, academics and civil society. The objective: to highlight the potential benefits of e-commerce and discuss how we can overcome barriers to realizing them.

During last week’s gathering, UPS joined panels to outline to policymakers what our global customers need in this booming e-commerce ecosystem. More specifically, governments need to make the right investments in information and communications technology and enact progressive regulations that keep pace with technological development.

Crucially, we also need customs procedures at borders capable of absorbing the increase in cross-border trade driven by e-commerce.

Powering e-commerce growth

We know e-commerce can help small and medium-sized enterprises enter new markets and grow exponentially. It can also expand choice for consumers and enable inclusive growth that benefits society.

And it is already growing fast – UNCTAD’s 2017 Information Economy Report found the global value of e-commerce increased to $25 trillion in 2015, up from $16 trillion in 2013.

"The global value of e-commerce increased to $25 trillion in 2015, up from $16 trillion in 2013."

Traders too often run into unnecessary red tape at borders, making international commerce more costly and time consuming, particularly for SMEs moving many small shipments.

However, we have a powerful tool in the World Trade Organization’s Trade Facilitation Agreement(TFA), and countries that want to create the right environment for e-commerce to flourish should focus on implementing it – particularly articles aimed at simplifying documentation, introducing pre-arrival clearance, bolstering data-driven risk assessment and establishing a single window clearance process.

Each of these provisions can make trade more efficient and less costly, enabling economic growth.

Putting improvements in place

But how do we help countries implement the TFA?

UPS opted to be a founding partner in the Global Alliance for Trade Facilitation, an initiative bringing together governments and businesses to deliver trade facilitation reforms in developing and least-developed countries, because of its unique approach to public-private partnerships.

"Businesses and governments are now approaching trade facilitation reform as equal partners."

Participating in the Alliance goes far beyond the typical business involvement in many other initiatives. It’s more than attending events, adding our logo to materials or giving money.

The co-creation process of the Alliance means that governments and businesses take shared responsibility for delivering trade facilitation reforms. Government agencies and local businesses whose goods cross borders daily lead the charge to reduce red tape at borders.

Businesses and governments are now approaching trade facilitation reform as equal partners. The Alliance is already making progress on those four areas of customs modernization through its projects in Colombia, Ghana, Kenya and Vietnam.

UPS has lent our in-house experts in technical engineering, legal and brokerage directly to in-country Alliance projects. We have these experts because we face these types of non-tariff barriers to trade around the world every single day. The Alliance gives us a platform to lend that expertise to deliver real change.

When it’s easier to trade, more trade happens, and that’s when the full potential of inclusive growth through e-commerce will really be unlocked.

[Top photo: E-Commerce Week in Geneva, Switzerland] 

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