UN trade body reviews blockchain use in global supply chain
A United Nations trade body is examining how new technologies such as blockchain could transform global trade and supply chain inefficiencies.
The international organisation’s Centre for Trade Facilitation and Electronic Business (UN/CEFACT) recently published a white paper – opened for public review on Tuesday – that assesses developing technologies and their potential benefits in revolutionising the manual processes that are still a part of international trade.
Supply chain automation
Global standards for trade facilitation and supply chain automation are core to UN/CEFACT’s mission and it is studying the potential impact of blockchain features such as “smart contract, electronic notary and decentralised process co-ordination” in refining the paperwork-heavy global trade and supply chain processes.
The international supply chain can be defined as a set of three flows – goods, funds and data. These three flows, UN/CEFACT says, are supplemented by a layer of trust, and this trust – or lack of trust – underlies every action in the international trade process, including:
- The provenance and authenticity of goods
- The stated value of goods for insurance, taxation and payment
- The protection and monitoring of goods through the process of shipment
- The payment of traders and service providers involved in a trade transaction
- Infomation relevant to regulatory authorities
Value and use cases
UN/CEFACT says it recognises “clear value and use cases” for blockchain technology, such as improving levels of trust in a transaction since the blockchain ledger cannot easily be falsified.
The body expressed some doubts, however, over interoperability – the potential for different blockchains to work together in the trade process.
It suggests, therefore, a platform that “participates in a multi-country blockchain ledger created through multilateral arrangements and in which multiple national platforms” can work.
UN/CEFACT concluded that it must “consult and engage with technical standard bodies and review existing technical standards to see what might be relevant for developing trade facilitation applications using blockchain”.