China formally enters UN treaty on paperless trade
The UN Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific (CPTA) will enter into force today, following China’s accession to the UN treaty in November.
China is joined by Azerbaijan, Bangladesh, the Philippines and Iran, which will fulfill the five requisite members to begin full enforcement of the treaty. The treaty, adopted in May 2016, aims to reduce transaction costs between acceded countries by facilitating trade with paperless options, such as making official documents and trade-related data available in electronic form. Treaty members expect this policy to reduce current transaction costs by as much as 30% when implemented. The CPTA will theoretically cover nearly two-thirds of the world’s population and 50% of global trade.
The treaty is only open to the 53 members of the Economic and Social Commission for Asia and the Pacific. Iran’s and China’s accession to the treaty will reduce the cost of the oil from Iran that fuels China’s economic development. Increasing paperless trade will also further reduce the barriers to entry for small and developing economies that wish to trade with China. This will further strengthen an Asia-centric trade system with China at the helm.
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