Event round-up: How can we engage more MSMEs in digital trade through regulatory cooperation?
On 17 November, during the Department for International Trade’s International Trade Week, techUK hosted a discussion exploring how businesses, government and regulators can work together to advance digital regulatory cooperation made in digital trade agreements, what lessons can be learnt from other countries, and how technology can facilitate the digitisation of trade to help more MSMEs to engage in cross-border trade.
The panel included:
- Graham Floater, Director of Trade Policy, Department for International Trade
- Matthew Peake, Global Director of Public Policy, Onfido
- Rebecca Harding, CEO, Coriolis Technologies
- Paul Moorby, Managing Director, Chipside
- Sabina Ciofu, Head of EU and Trade, techUK (Chair)
You can watch the full webinar here or read our summary of the key insights below:
Opportunities for businesses to influence trade
Paul Moorby from Chipside noted that the G7 Digital Trade Principles are underpinned by a desire to support SMEs to trade in mutually beneficial trading relationships. As digital transformation continues at pace, it is key for those on the ground to continue to feed information in from different sectors to government and oversight committees to influence agreements. He added that SMEs rely on external experts to facilitate trade, highlighting the agreed-in-principle Australia FTA as a shining example of what an SME would want from a trade agreement.
The role for tech in trade facilitation
Rebecca Harding shared research from Coriolis Technologies looking at the impact of digital trade facilitation and regulatory alignment across the G7 on digital trade, finding the potential to generate an additional £25bn in economic growth over the next five years, 25% additional SME trade by 2024 and £224bn in efficiency savings. By using mechanisms such as single windows, border compliance could also be reduced by around 81%. These numbers clearly demonstrate the benefits of trading more efficiently using technology.
Matthew Peake offered the view from Onfido, an SME which works in the remote identity verification space, facilitating the onboarding of customers using AI machine learning and human oversight. As Onfido operates across the world, different regulatory rules either directly impact its business or its customers, and Onfido’s priority is ensuring any regulatory blockers to market entry – such as data localisation – are addressed so that customers can scale into new markets using its technology.
Approaches to cooperation
Giving the government perspective on cooperation, Graham Floater emphasised that the UK sees widespread and varied cooperation as a good thing, and wants to bring together all stakeholders to discuss thorny issues with a view to getting the balance right between the free flow of data and all of the great benefits of digital trade, and rigorous standards in areas such as data protection.
At the G7, the UK brought together a number of parties around shared aspirations for digital trade which is now feeding into the work of the WTO and eCommerce negotiations. Graham said the UK can move the dial at a multilateral or plurilateral level as well as from the bottom up through FTAs, and reiterated that fora such as this session, FTA committees and others are key to informing the UK approach.
Looking at examples of where regulatory cooperation has helped businesses, Matthew Peake pointed to the good work of the FMA in Austria in allowing remote biometric authentication for customers in financial services following conversations with Onfido on good practice.
Further cooperation of industry groups, such as between techUK and NASSCOM in India, was highlighted as another example of how effective cooperation at different levels can support SMEs and build a better understanding how to facilitate digital trade.
International agreements, UK opportunities
Panellists agreed it is important not to lose sight of the fact that the tech sector is uniquely placed to design something with universal transformative appeal. The UK is a trusted brand which has worked well on cybersecurity and has good open business regulation, allowing SMEs to trade into many countries. The great role of FTAs is in enabling SMEs to talk to peers across the country and explore what work can be done with those parameters to create real opportunity for young people in the UK.
A look to the future
The session concluded with taking a forward look at the digital trade environment in ten years’ time, outlining where the risks and opportunities might arise.
It was emphasized that the capacity of technology is to enable trade on the basis of a shared interoperable platform that is flexible and can provide bespoke solutions for SMEs across the world. The big opportunity is in working together on standardisation and bringing learnings from FTAs into the WTO, as well as in closing the SME trade finance gap.
The UK has a great opportunity and is already exporting best practice in its FTAs, encouraging the Government to carry this work on at pace whilst addressing challenging markets. At the moment there is a patchwork environment for businesses facing key issues around digital protectionism, data flows and cyber security, and rectifying these will be essential to enable businesses to scale into new markets.
It was also noted that in ten years’ time we might no longer be talking about the ‘digital economy’ but instead simply ‘the economy’. And as digital trade becomes synonymous with the global economy, therein lies the big opportunity for UK tech.
Jake Wall
Jake has been the Policy Manager for Skills and Future of Work since May 2022, supporting techUK's work to empower the UK to skill, attract and retain the brightest global talent, and prepare for the digital transformations of the future workplace.
Sabina Ciofu
Sabina Ciofu is Associate Director – International, running the International Policy and Trade Programme at techUK.
