UK economy to receive £1 billion boost through innovative trade digitalisation act
Electronic Trade Documents Act receives Royal Assent, making trade more straightforward, efficient and sustainable
- Electronic trade documents to be granted same legal status as physical trade documents, making trade more efficient, cleaner and cheaper for firms
- UK economy set to see over £1 billion boost over the next decade, with UK businesses enjoying huge cost savings
- Act is a cornerstone to not only revolutionising how the UK trades, but to digitalising trade across the world
A new law allowing shipping containers to be traded using digital documents, not paper ones, has been created after the Electronic Trade Documents Act received Royal Assent today (Thursday 20 September).
The simple yet impactful change is estimated to add over £1 billion to the British economy over the next decade by making trade more straightforward, efficient and sustainable.
Paul Scully, Minister for Tech and the Digital Economy said:
"The global container shipping industry generates billions of paper documents a year – and in reality there’s no need for the immense costs UK businesses have to face in producing them, and the detrimental environmental impact that this has.
"What may look to many of us as a small change to the law is something that will have a massive impact on the way UK firms trade, and in turn, is going to boost our economy by over £1 billion over the next decade."
Existing laws dating back to the 1800s previously meant that exporters and importers have to use paper documents to transfer ownership of the goods they are shipping – creating a costly, inefficient and outdated way of working.
The government estimates that the new law could generate a net benefit of £1.14 billion for the British economy over the next decade for UK businesses trading across the world, supporting the Prime Minister’s priority of growing the economy.
UK Minister for International Trade, Nigel Huddleston, said:
"This new act will make it easier for businesses to trade efficiently with each other, cutting costs and growing the UK economy by billions over time.
"It’s exciting to see the power of technology being harnessed to benefit all industries, reduce paper waste and modernise our trading laws."
UK businesses, both big and small, have been calling for paperless trades for decades, especially as the development of electronic document technologies has become increasingly feasible for the industry.
With less chance of sensitive paper documents being lost, and stronger safeguards through the use of technology, digitalising trade documents is also set to give businesses that trade internationally greater security and peace of mind.
Secretary General ICC, United Kingdom Chris Southworth said:
"The Electronic Trade Documents Act is a game changing piece of law not just for the UK but also for world trade. The Act will enable companies to finally remove all the paper and inefficiency that exists in trade today and ensure that future trade is far cheaper, faster, simpler and more sustainable. This presents a once in a generation opportunity to transform the trading system and help us drive much needed economic growth."
Lord Holmes of Richmond said:
"It has been an honour to sit on the Special Public Bill Committee for this ground-breaking, potentially, game-changing, Act.
"This is a small change in the law with the potential to make a colossal impact, unleashing innovation and investment in digital trade solutions and delivering significant economic and environmental benefits. Currently it can take days to transfer documents of title – with digital trade documents that will melt into minutes."
With English law being the very foundation of international trade, this Act puts the UK ahead and in the lead of not only other G7 countries, but almost all other countries in the world. The UK is widely seen as a leader in digital trade and is setting out an approach which the rest of the world will seek to follow. The International Chamber of Commerce estimates 80% of trade documents around the world are based off English law, and this Bill serves as the cornerstone to truly digitalising international trade.