New research by the World Trade Organization and the World Customs Organization indicates that there are trade gains to be made from widespread adoption of new, advanced, data technologies but a variety of issues, such as data privacy, a lack of expertise, and information accessibility – among others – can hinder adoption.
Technologies such as blockchain / distributed ledgers, internet of things, big data / data analytics, artificial intelligence and machine learning have been examined by the WTO to identify how trade can be facilitated and how customs authorities can be helped to meet their objectives.
WTO Deputy Director-General Anabel González said: “Advanced technologies offer customs an opportunity to take a big leap forward on trade facilitation. Take blockchain. Its widespread application could help us make trade both more transparent and less paper intensive. That would reduce trade costs, which is good news for everyone, especially small businesses, which are disproportionately affected by red tape at the border.”
WCO Deputy Secretary General Ricardo Treviño Chapa said: “Technologies will assist implementation of international trade facilitation rules and standards, such as the WCO Revised Kyoto Convention and the WTO Trade Facilitation Agreement”.
The joint WTO / WCO document, “The role of advanced technologies in cross-border trade: A customs perspective” highlights the opportunities and challenges customs authorities face in adopting new technologies.
Distributed ledger technology
Distributed ledger technology, such as blockchain, can help provide better transparency, resistance to data being changed, data accessibility and ease of sharing among stakeholders. However, there are challenges in overcoming a lack of expertise and management of costs. More widely available and standardised datasets would be beneficial and would potentially prevent a proliferation of different, unconnected, blockchain solutions.
Internet of Things
Some customs authorities have had positive experiences experimenting with the Internet of Things (i.e. physical devices of every conceivable kind being connected to the internet to share and collect data). The IoT has been used to fully automate border-crossings and customs procedures in some circumstances. Other projects have included the use of radio frequency identification antennas or e-seals to ensure the traceability of goods and means of transport. However, the WTO / WCO document notes that there would be benefits in better risk management, greater efficiency of customs clearance processes, and improved analytics. Challenges are found in the integration of information collected via IoT devices into customs’ systems. There are challenges in compatibility and interoperability while also preserving security and privacy.
Big data, data analytics and machine learning
Customs authorities have “embraced” advanced data analysis. Around half of customs authorities use some combination of big data, data analytics, artificial intelligence and machine learning. The rest plan to use these technologies. Benefits have been found in relation to risk management, fraud detection and compliance. However, there are challenges in data governance. Data protection laws limit how data can be used. Resources are needed to address implementation challenges such as cost, and the need for expertise.
The World Trade Organization is a non-United Nations global international organization focused on international trade rules. The World Customs Organization is an independent intergovernmental organization that represents about 184 customs administrations around the globe.
Further reading:
“The role of advanced technologies in cross-border trade: A customs perspective“; World Trade Organization; World Customs Organization
