The International Chamber of Commerce (ICC) has formed an advisory board comprising intergovernmental, policy and industry actors in the global trade and trade finance industry, in order to accelerate progress on the worldwide legal reform needed to enable digital trade.
Launched today under the auspices of the ICC’s Digital Standards Initiative (DSI) governance board, the Legal Reform Advisory Board (LRAB) is co-chaired by Chris Southworth, secretary general of ICC UK and Valentina Mintah, customs and logistics expert and member of the ICC executive board. Its members so far include the Asian Development Bank (ADB), BAFT (Bankers Association for Finance and Trade), the Commonwealth, ICC France, ICC Germany, ICC Mexico, the International Trade and Forfaiting Association (ITFA) and the United Nations Commission on International Trade Law (UNCITRAL).
GTR understands that 30 organizations in total have agreed to join the board, although these are yet to be announced.
The aim of the LRAB is to combine its members’ reach and influence to drive a globally harmonized, digitalized trade environment. “We have made enormous progress on legal harmonization over the last two years. The LRAB will play a vital role in helping us scale legal reforms,” says Southworth.
He tells GTR that the board will immediately get to work on numerous fronts. One of these will be on maintaining momentum at the G7, following the commitment made earlier this year by the intergovernmental group’s digital and technology ministers to adopt electronic transferable records in international trade transactions. In addition, the LRAB will focus its efforts on scaling the initiative up through the G20 – aiming to achieve a similar commitment in 2022.
Another area of work is within the European Union, where the LRAB will set its sights on getting an EU-wide mechanism in place to facilitate the alignment of EU laws to the UNCITRAL Model Law on Transferable Electronic Records (MLETR).
Other tasks on the to-do list include obtaining a Commonwealth ministerial commitment at the Commonwealth Heads of Government Meeting, which will be held in Rwanda in 2022, as well as working to incorporate legal harmonization into the framework of the African Continental Free Trade Area. Southworth tells GTR that LRAB will seek to secure funding for lower-income countries to enable them to implement the necessary legal changes.
“Digitalization is key to narrowing the US$1.7tn trade finance gap, but we can’t get there without an enabling legal environment. Reform is needed and the LRAB will help us scale existing efforts,” says Steven Beck, head of trade and supply chain finance at the ADB.
The LRAB also intends to work with the World Trade Organization to include a commitment to MLETR alignment in its plurilateral e-commerce agreement.
Finally, the LRAB will support individual governments to use their bilateral trade negotiations – such as those already agreed or underway between Singapore and the UK, the Abu Dhabi Global Market and China, as a vehicle to align legal frameworks and build out a network of modern digital trade highways.
“The Covid-19 pandemic massively accelerated digital transformation across a range of sectors, but outdated legal frameworks continue to inhibit the digitalization of trade finance,” says Raoul Renard, deputy director of legal reform at the DSI. “I look forward to working with our co-chairs and LRAB members – such as the ADB – to enable the necessary legal reform and bring trade finance into the 21st century.”
“Everyone coming together within the LRAB sends a strong message to policymakers and governments worldwide that industry is serious about effecting legal reform as well as ensuring a level playing field so that no-one is left behind,” Southworth tells GTR.
He adds that he expects to see “upwards of 100 countries” getting on board over the course of 2022-23.