How Developing Countries Benefit from Digital Trade

Digital channels enable economies to participate in regional and global trade. In particular, developing countries that are often disadvantaged by less efficient infrastructure and policy frameworks. These can leverage digital channels to become part of global value chains and use trade as an engine of growth and sustainable development.

A recent study by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) found that even moderate region-wide improvements in trade facilitation in Asia-Pacific could lift the regional GDP by 0.32% annually between 2015 and 2030. That’s $87 billion per year.

The additional growth is achieved on different levels: Consumers benefit from access to a broader range of goods and services at competitive prices. Businesses have access to a bigger market, and digital channels enable opportunities for entrepreneurship and job creation. Governments also benefit from digital trade. Access to technology can help them deliver more and better public services, improve governance, evaluate policies, and deliver better overall results.

Digital trade requires a useful policy framework

Although the impact of digital trade on developing countries is positive, many of those benefits have not yet materialized at scale. That’s mostly due to adoption barriers, transition costs, and ineffective trade policies.

To fully reap the benefits of digital channels, developing countries need to ramp up their efforts to facilitate digital trade. One way is to eliminate tariff barriers on digital channels, for example, digital goods and service taxes. Another way is to reduce non-tariff barriers such as bureaucracy and regulatory hurdles by implementing automated customs systems, electronic single windows, and other digital customs and trade facilitation initiatives.

Facilitating trade, especially digitally, should be a top priority for policymakers. Besides policy changes, the use of international trading platforms such as Export Portal’s digital B2B marketplace can additionally boost digital trade. EP provides greater transparency, facilitates international payments, and gives guidance on international trade regulations. Register today to join the global trade revolution!