Amid rising interest on blockchain, the World Trade Organization (WTO) issued a new report seeking to demystify the technology and analyse its capacity to transform world trade. The publication explores how the technology could enhance areas related to WTO work and examines challenges that will have to be tackled to unlock the technology’s potential.
The maritime and transport industry have shown an increased interest in blockchain technology in recent months. Blockchain, as a secure and decentralised shared database, forms the basis for the so-called ‘Smart Contracts’, as it ensures that no one person exclusively controls it and eases in this way transactions. Earlier this year, Maersk, and its multinational technology partner, IBM, named their joint blockchain venture, marking another step towards the upcoming transformation of global trade. Meanwhile, Japan’s NYK recently revealed plans to build an innovative system by launching its own digital currency for seafarers.
In this regard, the publication introduces the technology with a basic explanation of how, as a tamper-proof, decentralized record of transactions, it allows participants to collaborate and build trust with each other. It describes different classifications of blockchains and their current and possible applications in the various areas covered by WTO rules.
In doing so, it provides an insight into the extent to which this technology could help with trade facilitation, including how it can hasten the transition to paperless trade transactions. It considers Blockchain’s potential and limits in transforming services by looking at payment systems, insurance and the automation of contracts. The publication also discusses how Blockchain could help ease the administration of intellectual property rights and enhance government procurement processes.
The report additionally reviews various challenges that must be addressed before the technology can be used on a wide scale, such as whether the technology can be scaled up for large or complex applications, how immune it is to security threats, to what extent various blockchain platforms can be used in an integrated manner, and which legal issues need to be ironed out to increase mainstream use of the technology.
Concluding, the publication calls for a multi-stakeholder dialogue to assess the practical and legal implications of the technology and to develop collective solutions to existing challenges while providing the flexibility for the technology to thrive.
While this technology opens interesting opportunities, clearly it also raises legal, regulatory and policy issues that deserve our attention. We need to consider how to spread the opportunities and overcome the challenges. We can only do this if we are in full possession of the facts. We need to fully understand the technology – what it can do and what it can’t do. And most importantly for us, we need to understand what it means for international trade,
…WTO Director-General, Roberto Azevêdo, said at the WTO workshop where the book was launched.
Explore more herebelow:
