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UN Agreement on Facilitation of Cross-border Paperless Trade enters into force

On February 20, 2021 the UN Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific (CPTA) came finally into force, 90 days after the date on which the Governments of 5 ESCAP member States have deposited their instruments of ratification or accession, as stated in Article 19 of the Agreement (the list of the countries that accessed or ratified the agreement is available here).

Developed after more than four years of negotiations, the CPTA was adopted by UNESCAP (United Nations Economic and Social Commission for Asia and the Pacific) in May 2016. Its aim at promoting cross-border paperless trade by accelerating the implementation of digital trade facilitation measures for trade and development based on the exchange and mutual recognition of trade-related data and documents in electronic form, mainly through single window systems. Indeed, the Agreement expressly aims at facilitating interoperability among national and subregional single windows or other paperless trade systems for the purpose of making trade transactions more efficient and transparent while improving regulatory compliance, as stated in Art. 1 of the Agreement. It must be noted that within the ESCAP member states, the ASEAN member states (Association of Southeast Asian Nations) have already agreed to interconnect and integrate their national single windows into a regional single window system.

The CPTA is open to all 53 ESCAP member states for accession (or ratification, for those who signed it earlier). Besides the five countries that so far have ratified the agreement (Azerbaijan, Bangladesh, China, Iran and the Philippines), several other UNESCAP member states are in the process of completing their domestic processes for accession. Once a country becomes party to the Agreement, it is bound to implement a series of paperless solutions that in their complex are expected to cut the cost of trade in a measure ranging from 10 to 30% of existing transactions costs, according to the UNESCAP estimates. The CPTA doesn’t specify exactly which paperless solutions have to be adopted to facilitate cross-border paperless trade, but leaves the accessing/ratifying countries free to develop those ones that are more opportune according to their respective levels of development, that will rely on specific bilateral or multilateral agreements for their implementation. 

Although the CPTA covers solely the Asia and the Pacific region, including non-regional members like the UK, the Agreement could in future be expanded globally, considering that this text is complementary to the WTO Trade Facilitation Agreement. However, it should be noted that ESCAP member states already now cover nearly two-thirds of the world’s population and about 50% of global trade.

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