Governments globally aim for responsible resource use, reflected in open-to-interpretation regulations with hefty penalties that increase trade costs. Key issues:
- Measurement: Fulfillment metrics don’t account for carbon footprints or human rights (UFLPA).
- Verification: Lacking computer-readable rules hinders automation, relying on paper.
- Compliance Reporting & Audit: Export license screening, monitoring, and change management aren’t connected, missing identity and consent.
- Exclusion / Cost: SMEs face barriers due to limited services and expertise.
The UK government aims to reduce trade costs with Commonwealth partners post-EU membership. Reducing inefficiencies, ensuring environmental responsibility, and upholding human rights are priorities.
Cost of Trade: Nearly doubles export prices, with a third linked to non-tariff border expenses.
Trade Finance: A $1.7 trillion trade finance gap, mainly impacting SMEs, hinders cross-border trade.
Counterfeit Goods: Illicit trade is at least $600Bn (3% of world trade), causing market losses and reputational damage.
Environment: Growing consumer demand for sustainable products amid 25 billion tons of carbon emissions, 25 million in forced labor, and 400 million tons of hazardous waste yearly.
Border Control: Inspecting just 1% of 1 billion sea containers and a fraction of 100 billion parcel shipments poses challenges.
Cost of trade breakdown: About half is distribution costs, 20% is transport, and 30% relates to border barriers like tariffs, compliance, currency, language, information, and security.
SME Impact: SMEs contribute significantly to trade but need better access to finance.
Solutions: A common system for sharing verifiable credentials across international trade with three pillars on Web 3.0:
- Zero-Trust: Separating issuers from verifiers without human intervention.
- Interoperability: Open attestation without walled gardens.
- Secure Network: A shared public infrastructure for safety.
Leadership (Government): Collaboration across sectors, led by the public sector, is needed for efficient supply chains. Blockchain DLT on Web 3.0 promises enterprise efficiency.
Metaverse as Service Delivery: Trustless systems with decentralized authority can deliver services without central control.
Web 3.0 Vision: A blockchain-secure DLT with dispersed authority allows intermediary-free services, micro-payments, and shared information with permissions. Multiple digital personas under one entity with smartphone access can call AI for behavioral change and health.
Government Future: Governments won’t store data but access entity and individual wallets for remote, respectful reporting.
Metaverse Benefits: Monitoring regulations, predicting policy outcomes, and achieving a positive ROI become feasible.
