SPEECHES — DG ROBERTO AZEVÊDO
Remarks by DG Azevêdo
Good morning everyone.
It is my pleasure to welcome you to this research workshop on blockchain and international trade. This is the first such event dedicated to blockchain organized here at the WTO.
Let me begin by thanking our Economic Research and Statistics Division for organising today's session.
We are in the midst of an unprecedented digital revolution.
A few weeks ago, we launched this year's World Trade Report, which examines how digital technologies are transforming global commerce and looks at the challenges and opportunities that this will create.
Blockchain is one of the technologies we looked at in the Report.
Today, we are launching a further publication entitled "Can Blockchain revolutionize international trade?"
This publication further develops the research of the World Trade Report. It focuses specifically on blockchain and discusses in depth the potential impact that distributed ledger technology could have on international trade.
The author of this new publication is Emmanuelle Ganne. And she will provide an overview of her findings in a few moments.
But first, let me share a few thoughts with you.
Everyone has heard of Blockchain. It has become one of these buzzwords that you hear all the time. But it bears closer examination.
The technology first emerged during the 2008 financial crisis, at a time when people's trust in institutions, in particular financial institutions, was very low. And it came to prominence as the technology underpinning Bitcoin – the famous and highly controversial cryptocurrency.
Blockchain is still often associated with Bitcoin. But it is about much more than that.
The term Blockchain itself hides a complex reality.
It is often used in a generic way to refer to distributed ledger technology. But there are, in fact, different distributed ledger technologies, and multiple potential applications of these technologies.
What does Blockchain mean for international trade? Well, it could mean a lot.
International trade transactions often involve dozens of actors along the supply chain and remain highly paper intensive.
Blockchain could enhance the transparency and traceability of supply chains, accelerate the digitalization of trade transactions and automate processes.
It could give rise to a new generation of services, particularly in areas like transportation and logistics, financial services and insurance.
It could facilitate small businesses' access to global markets and trade finance by enabling them to create a digital identity and build trust with partners around the world.
It could also impact the administration and enforcement of intellectual property rights, thereby shaping the competition landscape.
And it could generate significant cost reductions and revenue gains. In fact, a recent study has estimated that the gains from Blockchain could deliver 3 trillion dollars of value worldwide by 2030.
To get a sense of the potential impact of the technology on international trade, one does not need to look far. Increasingly, the technology is now moving to real life applications.
Some retailers are already using it on a day-to-day basis to track millions of packages along their supply chains. Some blockchain-powered trade finance and trade transportation platforms are now processing live operations. Customs authorities and other government agencies are also investigating the technology. Some of these examples will be presented in more detail this morning.
But Blockchain is not suited to all situations. A lot of the hype is deserved – but it is not a solution to all problems.
In fact, the technology comes with its own set of challenges.
Existing blockchain platforms still do not talk to each other – or if they do it is only to a limited extent.
This is the "digital island problem", as some have called it.
In addition, many Blockchain applications require more than simply the Blockchain technology.
A few minutes ago, I noted that Blockchain could accelerate the digitalization of trade transactions. But it can only do so if the legislative framework allows for transactions to be carried out through digital means, and if laws recognize the validity of e-transactions and e-signatures.
Putting in place a conducive regulatory framework is essential. Without a policy environment that allows the technology to thrive, we may be losing the opportunity to make international trade more efficient and more inclusive.
The use of Blockchain also raises important policy questions.
The technology could, as I said earlier, facilitate small businesses' access to global markets and trade finance by enabling them to create a digital identity.
But what about the small farmers that do not even enjoy a mobile internet connection? How can they access the potential benefits?
While this technology opens interesting opportunities, clearly it also raises legal, regulatory and policy issues that deserve our attention.
We need to consider how to spread the opportunities and overcome the challenges.
We can only do this if we are in full possession of the facts. We need to fully understand the technology – what it can do and what it can't do. And most importantly for us, we need to understand what it means for international trade.
This requires an informed debate. And it needs to go beyond trade experts. Blockchain is a technology that has the potential to break silos, so we should not create silos in this discussion.
We need a debate among all stakeholders – the business community, blockchain experts, government authorities, representatives from other international organizations, and many others as well.
With our new publication, and with today's event, we are seeking to inform the debate and bring together this wider community.
So I hope that your discussions today will be very fruitful. And I hope that the ideas that emerge will help guide members' thinking and actions going forward.
Unfortunately, I cannot stay for the whole event, but I look forward to receiving a full report of the proceedings.
We have a fantastic set of panellists with us today. So I know you'll be in good hands.
Thank you for listening. I wish you a very productive event.