The digital revolution in trade: How tradetech is transforming global trade - Trade Treasury Payments

• Home
• Blog
• Articles
• The digital revolution in trade: How tradetech is transforming global trade

The digital revolution in trade: How tradetech is transforming global trade

Digital technologies are changing the way we live, work, and trade. As WTO Director-General Ngozi Okonjo-Iweala often says, the future of trade is digital, and it must be inclusive.

The digitalisation of trade has gained significant momentum over the past decade. Despite frequent discussions about the supposed decline of globalisation, the reality is quite different. Rather than fading, globalisation is evolving, with digital trade and intangibles, such as services, assuming an increasingly central role. According to WTO estimates, the value of global exports of digitally delivered services has quadrupled since 2005, expanding at an average annual rate of 8.2%, outpacing growth in both goods exports (4.8%) and other services exports (4.6%).

Artificial intelligence (AI) is poised to accelerate this shift further. AI is transforming international trade by reducing costs across logistics, supply chain management, and regulatory compliance while simultaneously driving demand for AI-enabled products and services. For developing economies, AI presents unprecedented opportunities to enhance economic development through improved accessibility to essential public services and upgraded quality standards. WTO simulations indicate that widespread AI adoption, coupled with high productivity growth, could boost global trade growth by nearly 14 percentage points by 2040.

At the same time, blockchain technology is being leveraged to digitise key trade documents such as bills of lading and certificates of origin and facilitate smoother information exchanges between companies and customs authorities, simplifying cross-border transactions.

However, the growing significance of digital trade should not overshadow the essential role of trade in goods, which serves as a fundamental enabler of this digital transformation. The shift towards a data-driven global economy, along with groundbreaking advancements in AI, would not be possible without tangible components such as high-performance computing systems and sophisticated microchips. Likewise, the underlying physical infrastructure—including vast telecommunications networks—remains indispensable in supporting the expansion of digital trade.

This interdependence highlights a critical shift: the “goodification of services” and the “servicification of goods”. Goods increasingly enable digitally delivered services, fostering trade in services, and services are increasingly embedded in goods, further blurring the boundaries between these categories. This dynamic underscores the importance of making trade in goods more efficient through digitalisation, as it not only enhances the efficiency of merchandise trade transactions but also fosters the scalability and accessibility of digitally delivered services.

Significant progress has been made in this area. The adoption of electronic bills of lading, a pivotal element in international trade, has accelerated significantly in recent years. A recent survey conducted by the FIT Alliance indicates that the proportion of companies using electronic bills of lading—whether exclusively or alongside traditional paper-based systems—has increased from 33.0% in 2022 to 49.2% in 2024. This can particularly benefit micro, small and medium-sized enterprises (MSMEs), which stand to gain the most from digital trade efficiencies. In 2021 and 2022, ICC United Kingdom and The Commonwealth published the benefits of digitalising trade transactions across 60 economies, large and small. The numbers speak for themselves: digitalising trade documents could cut trade transaction costs by 80%, reduce the trade finance gap by 50%, cut cross-border processing times from 25 days to one day, and increase MSME efficiency by 35%. 

Digital technologies offer developing countries and least-developed countries an opportunity to integrate more fully into the global trading system. For these economies to capitalise on digital trade, however, the digital divide must be addressed. While global internet penetration has risen from 54.9% in 2019 to 68% in 2024, approximately 2.6 billion people—predominantly in developing nations—remain offline, limiting their ability to engage in digital trade.

Another challenge lies in overcoming digital fragmentation. Many digital trade solutions are developed in isolation, lacking interoperability. Historically, trade digitalisation efforts have centred on individual trade documents or specific use cases rather than on the broader supply chain. To ensure seamless data exchange from end to end, a global interoperability framework is essential. 

The ICC Digital Standards Initiative—supported by key stakeholders such as the Asian Development Bank, the government of Singapore, the World Customs Organization, and the WTO—is working to develop a comprehensive global data interoperability framework. The WTO rulebook also plays an important role in promoting alignment with international standards. The Trade Facilitation Agreement encourages members to base import, export, and transit procedures on relevant international standards, while the Technical Barriers to Trade Agreement requires that Members align their national regulations and procedures with relevant international standards.

The growing importance of data also necessitates renewed attention to cross-border data flows. Cross-border data flow restrictions have been on the rise and data localisation requirements have been increasing in number and restrictiveness, threatening to undermine the benefits of digital trade. According to a recent OECD-WTO study, geoeconomic fragmentation of data flows could shrink global exports by 1.76% and reduce global GDP by almost 1%. Addressing these barriers requires enhanced international cooperation and alignment on data governance principles.

Looking ahead, the next decade is set to be defined by an even greater acceleration of digitalisation, driven by AI advancements, hyper-connectivity, real-time traceability, and automated trade flows. We are likely to witness the emergence of AI-driven trade ecosystems that seamlessly integrate predictive analytics, autonomous shipping fleets and logistics systems, and real-time regulatory compliance monitoring. Blockchain and AI could combine to create transparent, real-time, trustless trading environments. As digital twins and advanced simulations become mainstream, businesses will be able to optimise global trade strategies with unprecedented precision, further blurring the lines between the physical and digital economies. Services trade will flourish as virtual reality enables immersive cross-border collaborations, and next-generation quantum technologies may unlock new frontiers for digital trade.

However, realising this vision hinges on proactive policymaking today. Ensuring equitable access to digital technologies, fostering interoperability along the entire supply chain and across digital trade solutions, and achieving global consensus on data flow governance will be crucial to preventing uneven growth and deepening fragmentation in the tradetech landscape. By taking decisive action now, we can pave the way for a more inclusive, efficient, and interconnected global trading system.