LONDON – Earlier this week, an industrial valve produced in Britain left Manchester – the country’s second largest city – and arrived at Singapore’s Changi Airport. The event made history in commerce.
It was the first fully digitalized cross-border movement of goods between the two countries. The entire transaction (transportation, insurance and customs formalities) was completed without resorting to a single piece of paper.
The shipment was facilitated by an international consortium led by trading technology company LogChain, which is based in Singapore.
It used open, interoperable standards and distributed ledger technology (an infrastructure that allows simultaneous secure access to multiple databases around the world) to complete a completely paperless transaction.
Even in an age where almost everything has migrated online, this was no small achievement.
The United Nations Conference on Trade and Development estimates that an average customs transaction involves 40 different documents.
Therefore, the fact that all these procedures can now be completed without complications and completely online serves as an example of the potential for trade unleashed by a pioneering initiative. Digital Economy Agreement between the United Kingdom and Singapore, what made everything happen.
And the implications of the new agreement go further, far beyond simply encouraging better trade flows.
The latest statistics just released from London indicate that total bilateral trade between Britain and Singapore exceeds £21 billion (S$35 billion).
While it is fashionable to claim that British trade continues to suffer due to the country’s withdrawal from the European Union, the reality remains that British exports to Singapore have expanded by a fifth over the past year.
More importantly, Singapore accounts for 40 per cent of Britain’s total trade with Southeast Asia. No less than 70 per cent of British companies active in Asia are based in the Lion City.
Singapore is also the third largest foreign investor in Britain.
The combined value of Singapore’s foreign direct investments plus holdings by Singaporean entities in British-based stocks, bonds and other financial instruments amounts to £226 billion.
And again, far from shrinking, these have seen a cumulative rise of 90 per cent since Britain’s 2016 decision to leave the EU.