Liberalized trade has long been heralded as an important feature of the multilateral trading system and trade facilitation is a necessary step for achieving it. For small developing countries like Antigua and Barbuda, participation in liberalized trade via the multilateral trading system requires this country to implement simple and user-friendly import and export procedures for goods that are compatible to the delivery expectations of the other countries. As a result, one specific aspect of trade facilitation that must be implemented in small economies like Antigua and Barbuda is the Single Window. Currently, Antigua and Barbuda has no single window model operating in this economy.
Trade Single Windows (TWS) are single electronic interface where exporters and importers can submit regulatory and commercial documents to Ministries and other cross border regulatory agencies as well as private stakeholders like the Antigua and Barbuda Chamber of Commerce, thus reducing the costs related to the preparation and submission of paperwork required for completing an international transaction. The main advantage of TSW is that exporters and importers can avoid spending time completing paper documents manually, re-entering the same data multiple times for the regulatory purposes of different entities and visiting government agencies in person to secure signatures and stamps.
Many countries however, especially developing countries like Antigua and Barbuda are facing significant problems in the implementation of TSWs and even more so in the use of blockchain technology within the context of TSWs. These problems are:
Thus, the challenges of using blockchain technology in the context of a Trade Single Window trade facilitation project in Antigua and Barbuda are:
(1) Regulatory and legal frameworks: adapting existing regulations in Antigua and Barbuda to accommodate blockchain technology and smart contracts would be a significant challenge. Hence, new legal and regulatory frameworks will be needed to clarify the use of contracts, digital signatures, data protection, privacy, and intellectual property.
(2) Incompatibilities with legacy infrastructure: the integration of blockchain solutions with legacy systems at the Antigua and Barbuda Port Authority, and the Antigua and Barbuda Customs and Excise Division, will be complex and will require significant modifications, over-hauling, data migration or complete restructuring with significant cost implications to a small island developing state (SIDS) country and developing country like Antigua and Barbuda.
(3) Capacity and scalability limitations: the storage capacity, throughput, and performance of most blockchain networks are still inadequate for most trade facilitation purposes.
(4) Architecture and design difficulties: deciding on technical specifications around speed, security, level of decentralization, consensus algorithms and governance structures that will drive efficiency, transparency, authority, and accountability will be difficult for Antigua and Barbuda when designing a blockchain for multiple trade facilitation needs for multiple stakeholders in this small island developing (SID) state.
(5) Data privacy and security concerns: trade documents and data are proprietary, confidential, and non-public. This makes blockchain features such as data encryption very useful. But user-facing applications and smart contract logic will present critical vulnerabilities in the protection of such data in Antigua and Barbuda.
(6) Talent and expertise deficits: the shortage of skilled professionals with expertise in development, architecture, consensus mechanisms, distributed systems and cryptography presents a key challenge for implementing and maintaining a blockchain system in Antigua and Barbuda. For instance, typical talent and expertise deficits, I am the only enrolled person from Antigua and Barbuda who did this UNCTAD course on blockchain technology in trade facilitation, and I am registered on this course as a board member of the Caribbean Women in Trade (CWIT) which is a CSO (civil society organization). I am not from a government agency nor a private sector trade facilitation stakeholder of Antigua and Barbuda.
(7) Adoption and user acceptance challenges: limited understanding of blockchain as well as negative attitudes and high scepticism towards the technology can affect user acceptance.
(8) Resource constraints and cost concerns: there are significant costs in relation to infrastructure development, system integration and ongoing maintenance, as well as stakeholder empowerment and user support.
Thus, addressing these blockchain technology challenges call for a strategic approach, interconnectivity, and a collaboration between and among public sector and private sector stakeholders in trade facilitation, and Antigua and Barbuda's willingness to invest and adapt new technologies together with a robust, dynamic regulatory environment. Above all, public private partnerships (PPP's) with the private sector stakeholders, academic institutions and industry will be necessary and crucial in the utilization of blockchain technology in a trade facilitation project of implementing a Trade Single Window in Antigua and Barbuda.
Thus, the World Economic Forum, with the White Paper "Windows of Opportunity: Facilitating trade with Blockchain Technology" explores the application of blockchain technology within Trade Single Windows, indicating how their implementation can be fast tracked through this new technology. This white paper is a good resource that the current government ought to consult in the utilization of blockchain technology in the trade facilitation project of implementing a much-needed Trade Single Window in Antigua and Barbuda.
Trade Single Windows (TWS) are single electronic interface where exporters and importers can submit regulatory and commercial documents to Ministries and other cross border regulatory agencies as well as private stakeholders like the Antigua and Barbuda Chamber of Commerce, thus reducing the costs related to the preparation and submission of paperwork required for completing an international transaction. The main advantage of TSW is that exporters and importers can avoid spending time completing paper documents manually, re-entering the same data multiple times for the regulatory purposes of different entities and visiting government agencies in person to secure signatures and stamps.
Many countries however, especially developing countries like Antigua and Barbuda are facing significant problems in the implementation of TSWs and even more so in the use of blockchain technology within the context of TSWs. These problems are:
- Agencies' long response times.
- Incomplete digitalization of trade documents and persistence of paper: in Antigua and Barbuda, if there was a TSW, all the documents electronically transmitted to the TSW also need to be accompanied by paper-based versions, because of the lack of electronic signature laws in Antigua and Barbuda or other legislation or regulation giving legal force and ensuring the authenticity of electronic documents.
- Redundancies, that is, the need to submit the same data multiple times to different authorities.
- Other challenges that can hinder the functioning of a TSW in Antigua and Barbuda are the lack of interoperability among IT systems of entities (both public and private sector) integrated into the TSW.
- The persistence of outdated processes and the limited visibility and traceability of shipped goods. In Antigua and Barbuda, the government regulatory agencies are unable to be interconnected to a TSW so government agencies like the Antigua and Barbuda Customs and Excise Division (ABCED) lack the capability to trace goods in supply chains, verify their origin, and detect anomalies like their fraudulent patterns. Everything currently in Antigua and Barbuda is being done manually. No Trade Single Window exists.
- Ultimately, the cost to implement a TSW is the biggest hindrance and the cost to use blockchain technology in the context of a Trade Single Window in Antigua and Barbuda is another high expense.
Thus, the challenges of using blockchain technology in the context of a Trade Single Window trade facilitation project in Antigua and Barbuda are:
(1) Regulatory and legal frameworks: adapting existing regulations in Antigua and Barbuda to accommodate blockchain technology and smart contracts would be a significant challenge. Hence, new legal and regulatory frameworks will be needed to clarify the use of contracts, digital signatures, data protection, privacy, and intellectual property.
(2) Incompatibilities with legacy infrastructure: the integration of blockchain solutions with legacy systems at the Antigua and Barbuda Port Authority, and the Antigua and Barbuda Customs and Excise Division, will be complex and will require significant modifications, over-hauling, data migration or complete restructuring with significant cost implications to a small island developing state (SIDS) country and developing country like Antigua and Barbuda.
(3) Capacity and scalability limitations: the storage capacity, throughput, and performance of most blockchain networks are still inadequate for most trade facilitation purposes.
(4) Architecture and design difficulties: deciding on technical specifications around speed, security, level of decentralization, consensus algorithms and governance structures that will drive efficiency, transparency, authority, and accountability will be difficult for Antigua and Barbuda when designing a blockchain for multiple trade facilitation needs for multiple stakeholders in this small island developing (SID) state.
(5) Data privacy and security concerns: trade documents and data are proprietary, confidential, and non-public. This makes blockchain features such as data encryption very useful. But user-facing applications and smart contract logic will present critical vulnerabilities in the protection of such data in Antigua and Barbuda.
(6) Talent and expertise deficits: the shortage of skilled professionals with expertise in development, architecture, consensus mechanisms, distributed systems and cryptography presents a key challenge for implementing and maintaining a blockchain system in Antigua and Barbuda. For instance, typical talent and expertise deficits, I am the only enrolled person from Antigua and Barbuda who did this UNCTAD course on blockchain technology in trade facilitation, and I am registered on this course as a board member of the Caribbean Women in Trade (CWIT) which is a CSO (civil society organization). I am not from a government agency nor a private sector trade facilitation stakeholder of Antigua and Barbuda.
(7) Adoption and user acceptance challenges: limited understanding of blockchain as well as negative attitudes and high scepticism towards the technology can affect user acceptance.
(8) Resource constraints and cost concerns: there are significant costs in relation to infrastructure development, system integration and ongoing maintenance, as well as stakeholder empowerment and user support.
Thus, addressing these blockchain technology challenges call for a strategic approach, interconnectivity, and a collaboration between and among public sector and private sector stakeholders in trade facilitation, and Antigua and Barbuda's willingness to invest and adapt new technologies together with a robust, dynamic regulatory environment. Above all, public private partnerships (PPP's) with the private sector stakeholders, academic institutions and industry will be necessary and crucial in the utilization of blockchain technology in a trade facilitation project of implementing a Trade Single Window in Antigua and Barbuda.
Thus, the World Economic Forum, with the White Paper "Windows of Opportunity: Facilitating trade with Blockchain Technology" explores the application of blockchain technology within Trade Single Windows, indicating how their implementation can be fast tracked through this new technology. This white paper is a good resource that the current government ought to consult in the utilization of blockchain technology in the trade facilitation project of implementing a much-needed Trade Single Window in Antigua and Barbuda.
Natasha Gomes-George
