The connection between the UK, the world’s third-largest digital economy, and Thailand, the second-largest digital economy in the Association of Southeast Asian Nations (ASEAN) has never been stronger; and it’s all thanks to the power of digital.
A newly-published report, jointly released by The International Chamber of Commerce (ICC), the United Kingdom’s Centre for Digital Trade and Innovation (C4DTI), the Electronic Transaction Development Agency (ETDA), the Centre for Applied Sustainable Transition Law (CASTL) and the British Embassy to Bangkok, highlights the significant amount of progress made in establishing a digital trade partnership between Thailand and the UK.
The report uses figures from a project that the Foreign, Commonwealth and Development Office (FCDO) is funding to assist Thailand in removing legal barriers and digitising trade.
In essence, the project is seeking to better connect the UK with Thailand and enable both governments to establish a paperless trade corridor in an attempt to make imports and exports cheaper, faster and generally simpler for companies on both sides.
The success of this project, which forms the basis of the aforementioned report, has been attributed to C4DTI’s technical assistance to Thailand to support the removal of legal barriers and alignment of national law with the UN Model Law on Electronic Transferable Records (MLETR).
The digitalisation of Thai-UK trade
Most importantly, this application is making it possible to handle and process commercial trade documents in a user-friendly digital format, which is part of a broader effort to make the entire trading system paperless.
Small and medium-sized businesses operating in both economies stand to benefit significantly from this digital revolution. The removal of complex, paper-based processes, reduction of associated costs, and acceleration of the flow of trade transactions are among the chief benefits.
Projects such as this help to address the burdensome, paper-heavy processes that act as a barrier to the flow of transactional information and ultimately, a drag on economic growth.
ICC and Commonwealth studies estimate that legal reform will deliver $9trillion in trade growth across the G7 and $1.2trillion across the Commonwealth in addition to an 80 per cent cut in trade transaction costs, a 75 per cent reduction in processing time and the cutting of the trade finance gap by half ($1.7trillion worldwide).
A typical transaction currently requires up to 27 paper documents and takes up to three months to process. Yet the entire process could be completed within hours if digitised. In total, 4 billion paper documents float through the trading system at any given time.
A promising start
Reacting to the report and the success of the project to date, Chris Southworth, secretary-general of ICC United Kingdom, describes the projects as “a great example of the international community working together to provide the right legal environment that supports future trade.”
Southworth confirms the project’s next steps to begin testing systems to ensure information can flow freely in digital form, without any need for paper.
“We must continue to show the international community the incredible opportunities that paperless trade brings across the globe, opening SME access to new markets with minimal friction and less disruptive bureaucracy at borders,” he adds.
In view of the thoroughly established trade corridor between the UK and Thailand, Mark Gooding OBE, His Majesty’s Ambassador to the Kingdom of Thailand, says that the collaboration between the two nations to reduce the barriers associated with international trade through digitalisation and the adoption of electronic transferable records (ETRs) is of “vital importance.”
“Like Thailand, the UK is committed to driving global economic growth through the advancement and adoption of digital trade; a priority that we were thrilled to pioneer during our G7 Presidency in 2021,” comments Gooding.
‘We still have a long way to go’
Thailand’s National Digital Economy Strategy Plan, scheduled for delivery in 2027, includes improving national competitiveness by reducing legal barriers and enhancing trade facilitation as one of its national goals.
With this, Dr Sak Segkhoonthod, executive advisor and acting deputy executive director at the Electronic Transactions Development Agency (ETDA) under the Ministry of Digital Economy and Society, Thailand, says Thailand has been developing and providing the legal frameworks and the standards to promote cross-border e-transactions; citing the Electronic Transactions Act as a clear example of this.
“Along the journey of Thailand’s digital transformation, communication and collaboration with the stakeholders during the process and after implementing laws and standards is the key success factor,” says Segkhoonthod.
“Even though we still have a long way to go to accomplish the cross-border e-transactions and trade facilitation, there is a positive contribution from all stakeholders to try to reduce the gap in digital trade same as the contribution in this project.”