Page 46 - ASEAN BUSINESS AND INVESTMENT SUMMIT 2019

46 ABIS 2019

ASEAN Digital Trade Connect

With priority agendas of ASEAN and ASEAN-BAC on digitalized ASEAN, seamless
connectivity, inclusive growth, sustainable development and SME capacity and access to finance,
ASEAN-BAC have identified and pursued a Digital Trade Connect (ASEAN Regional Digital Trade
Transformation) project, which will turn ASEAN to the next level toward digital economy and will
bring several benefits to ASEAN.

As we are aware, processes of international trade transactions, whether bilateral, sub-regional,
or regional, remain largely paper-base and involve several steps of manually use/key-in and reuse/
re-key information and data, as well as frequent transmission of physical paper documents. Thus,
it is apparently that the current process is inefficient, unsecure, and incurs high operating costs
due to the fragmented and intersystem incompatibility resulting from programs that have been
independently developed within the trade and supply-chain ecosystem. The current process of
international trade faces challenges on the issue of “trust”. This issue of “trust” is from the risk of
potential frauds and the use of duplicate documents for financing. This has caused banks to be
more conservative in their trade financing services, especially where their customers are SMEs.

The adoption of digitalization and advanced technologies would significantly reduce the
processing time and costs of international trade transactions and cross-border movements of goods.
Transforming from paper-based documents into electronic formats and applying smart tools and
technologies help reduce trade barriers, particularly for small businesses in high-risk and developing
countries. Thus, digitization of trade and supply-chain processes are undoubtedly important in the
facilitation of international trade. The digital transformation in several countries remains slow, with
many less-advanced economies still in their early stage of development of national paperless digital
trade system. On the other hand, more advanced economies within the ASEAN regional bloc and
throughout the Asia-Pacific region have already transitioned to paperless system. Nevertheless,
this technological and developmental disparity affects all parties involved, as such circumstance
prevents the creation of a system of interconnected platforms that could be fully interoperable
with one another. The principal purpose of the Digital Trade Connect(ASEAN Regional Digital Trade
Transformation) project is to improve the efficiency both in terms of the processing cost and time
of trade transactions and in terms of the connectivity of the entire process, which will be holistically
and integrally digitized from end-to-end. Furthermore, another purpose of this transformation
is to enhance the preexisting benefits of the digitization by promoting platform interoperability.
With harmonization of standards, as well as the standardization of common technical and legal
terminology, independently developed platforms can become interoperable and aligned with each
other, with an efficient transfer of data from one platform to another and to have this platform to be