Reshaping Trade with Emerging Technologies: Opportunities, Challenges and Next Steps  

Interview with Paul Baker, CEO and Founder of International Economics Consulting Ltd (IEC) and Joshua Kroeker, Chief Product Officer at Mitigram – Compiled by Smita Bheenick, Trade Specialist, International Economics Consulting Ltd


“The evolution towards a technology-driven approach in trade finance is essential for democratising access and fostering growth in global trade”

“There is immense potential for using generative AI to optimise decision-making processes, not only to enhance business operations but also to unlock new opportunities”

“Increased efficiency is one of the primary benefits of implementing these technologies”

“On the technical side, interoperability is challenging if different standards are adopted across different markets”



Emerging technologies are reshaping traditional trade practices. Trade technologies offer interesting opportunities for businesses, governments, and consumers, from artificial intelligence (AI), blockchain and Internet of Things (IoT) to digital payments. In this exclusive interview with Paul Baker, a Trade Thought Leader (P.B) and Joshua Kroeker, a Fintech Leader (J.K), we explore the potential and impact of emerging technologies in trade and the challenges to fully leverage these technologies.

How are emerging technologies being used in trade?

P.B: There are various successful applications of emerging technologies in trade. A common one is online retailers’ use of AI algorithms to optimise their supply chains. For instance, Amazon’s Supply Chain Optimisation Technology (SCOT) uses AI to forecast demand, manage inventories, and optimise delivery routes. Blockchain stands out as another promising technology for trade facilitation. Initiatives like the blockchain-based platform for electronic Certificates of Origin pioneered by the Singapore International Chamber of Commerce have shown the potential of blockchain in enhancing transparency and efficiency of trade document verification. Another fully operational blockchain solution is CADENA, which allows automated and secure information sharing on Authorised Economic Operators (AEOs) among customs administrations in eight Latin American countries. We recently explored the opportunities of using digital ledger technologies for development and trade financing for the Government of Germany. We have also produced a report in April 2024 published by the International Chamber of Commerce on using unique digital identifiers to promote digital supply chains in trade. Several other pilot projects are underway globally, moving from proof of concept to full-scale trade digitalisation and innovation projects.

J.K: In global trade, centralising data poses significant challenges. Blockchain’s decentralised nature aligns very well with the industry’s needs. This opportunity spurred the emergence of network-based companies, such as WeTrade, Marco Polo, Global Trade Connectivity Network, Contour, and others. These initiatives aimed to establish new communication networks for trade. While the concept of building these networks was progressive, they surpassed the industry’s readiness, leading many projects to be paused or abandoned due to insufficient incentives for a widespread transition to blockchain, causing many to question whether the technology is the right fit for the industry.

However, other use cases for blockchain show promise and do not require a big-bang adoption event, as with the communication networks. Today, blockchain’s utility in international trade is focused on creating digital title and ownership records. For example, trade finance still relies on physical documentation, such as signed papers exchanged globally. Digitising these obligations and assets into digital assets will do more than just remove paper; it will also present an exciting opportunity to broaden the pool of lenders involved in trade finance, consequently reducing the trade finance gap and promoting inclusion. There’s a demand for highly interoperable digital assets, often shared via email with embedded blockchain code for authenticity and ownership verification. While the initial ambition was to overhaul trade infrastructure with blockchain networks that everyone would have to join, the focus has shifted towards utilising blockchain for more specific tasks – such as tracking ownership and payment obligations, thus addressing specific industry needs and reducing barriers to progress.

Decision-making in trade finance often lacks data-driven approaches, relying instead on experience, intuition, and relationships. The evolution towards a technology-driven approach in trade finance is essential for democratising access and fostering growth in global trade. There is immense potential for using generative AI to optimise decision-making processes, not only to enhance business operations but also to unlock new opportunities. For example, identifying suitable participants for trade deals presents a significant hurdle, particularly when expanding into new markets like sub-Saharan Africa. Traditionally, buyers seek payment terms without burdening working capital or risk, often relying on their banks to provide a letter of credit. However, finding banks willing to confirm these letters of credit for the overseas supplier poses a challenge, compounded by the trend of banks reducing their correspondent banking relationship due to the high costs of KYC and the lack of data present to support arguments to maintain them.

What is the impact of using such technologies for businesses?

P.B: Increased efficiency is one of the primary benefits of implementing these technologies. AI-powered systems for automation and analytics and smart contracts help to streamline processes, remove redundant data re-entries, and reduce costs associated with traditional trade. Verified digital identifiers have the advantage of eliminating fraudulent identities lowering supply chain risks. When blockchain is used, the decentralised nature of digital ledger technologies means transactions can be made transparent and immutable. In the field of payments, digitalised payment systems, such as those we advocated in Smart Africa’s Alliance Blueprint for e-Payments for the Facilitation of Digital trade in Africa, are expected to lead to simpler and cheaper transaction costs as well as reduce risks, benefitting SMEs involved in cross-border trade. The impact on businesses is undoubtedly positive, but companies must adapt to the rapidly changing landscape to remain competitive. I have been part of the World Economic Forum’s Trade Tech expert group, where we have published two reports in the last two years outlining significant business opportunities, from additive printing and robotics to smart agriculture and AI paperless trading ecosystems.

J.K: Businesses primarily seek trade finance because it provides access to working capital, effective risk management, and streamlined facilitation processes. However, achieving these goals through traditional trade finance products often necessitates specialised knowledge, leading to a talent gap. Hiring trade finance professionals may not be feasible for small and medium-sized enterprises (SMEs), while larger companies maintain dedicated teams for these tasks. Therefore, bridging the knowledge gap and providing access to expertise are crucial. SMEs typically rely on their single bank for information about trade finance, but assistance for SMEs is limited as the transaction sizes are smaller while administration costs are the same. A holistic technology approach, including platforms connected to blockchain networks that offer digital documents, can provide simplified trade finance solutions directly to corporations and connect them to multiple banks and alternative lenders who can collectively support a broader range of transactions than any one bank. This approach circumvents the impracticality of relying solely on traditional banking channels for such services.

Figure 1: Growth of emerging technologies against their impact on trade

Source: International Economics based on WEF (2020), Grand View Research (2024)

Note: Size of bubbles represents market value in 2023

Are there any regulatory or technical challenges to fully leverage these technologies?

P.B: Beyond the value of data markets per se, data sharing underpins these technologies, and for trade, data flows across borders. Beyond concerns for data privacy and security, the use of TradeTech is further complicated by the different regulatory frameworks across countries and fragmented approaches to data requirements (such as localisation). We are witnessing requirements being imposed in several countries, which can be a significant challenge to adopting these emerging technologies. While regulatory sandboxes are one way to pilot cross-border innovations, they remain relatively underexploited. On the technical side, interoperability is challenging if different standards are adopted across different markets. Technologies like blockchain or IoT require systems and components to work together across borders, and the business community needs to cooperate to achieve alignment and interoperability and unlock the full potential of these technologies.

J.K: At its core, international trade relies heavily on data exchange between nations. This data sharing occurs through traditional means such as courier bags, emails, and SWIFT messages. To facilitate smoother trade processes, it is essential to ensure that unnecessary barriers are not imposed on technological platforms that handle data, like how physical documents are allowed to move freely. Protecting, encrypting, and securing data is paramount, alongside implementing business rules for its use and aggregation. However, it is crucial to avoid regulatory hurdles that could impede trade, particularly for SMEs seeking access to finance. Regulatory frameworks should focus on meeting the security standards expected by regulated banks without creating undue obstacles for data exchange across borders. The regulatory frameworks of countries like Singapore and the UK show how such barriers can be minimised.

How can policies address these challenges to improve cross-border trade?

P.B: The international community needs to develop policies that accommodate the growing digital economy. However, consensus on cross-border data flows and data localisation has been very limited during negotiations. The role of the WTO remains relevant to advance in this area, and ongoing talks should include binding commitments to facilitate cross-border data flows. Regional Digital Economy Agreements and the recent Digital Trade Protocol of the AfCFTA are examples of the regional economic communities moving much faster than the multilateral system, with the benefits that this brings to its members. However, it also creates a proliferation of different rules and potential fragmentation of digital trade markets. As mentioned, regulatory sandboxes are an excellent way to promote cross-border cooperation in a safe regulatory environment.

J.K: I would like to highlight that data nationalisation is not a significant concern but rather a trend warranting careful consideration. While it may not present a significant obstacle at present, there are a few countries where navigating this issue proves more challenging. One factor that has facilitated this process is the availability of cloud options. Should countries choose to enact strict data regulations requiring data to be stored within their borders, it is essential to ensure that adequate cloud infrastructure is in place to support such measures.

Paul Baker is the founder and CEO of International Economics Consulting Ltd, a global management consultancy firm with offices in the UK, Mauritius, and Vietnam. He is also the founder and chairman of the Africa Trade Foundation, which is dedicated to building a thriving trade and investment ecosystem across the African continent. He has 30 years of experience as an economic adviser to governments from G7, G20, and G90 countries. He has held lead economist positions with various organisations, such as the World Bank, World Economic Forum, World Trade Organisation, Asian Development Bank, and several UN agencies. Paul has been named a Global Leader in Trade & Customs by Who’s Who Legal for the last eight consecutive years. He is a member of the expert group on Data flows for the World Economic Forum – the WEF/WTO Trade Tech Working Group on AI, IOT, Blockchain, and Digital Identities for trade. He currently serves as a Board Member of UNESCAP’s Trade Intelligence tools. He is a visiting professor at the College of Europe and has been a faculty member and visiting professor at international universities in Europe, Asia, and Latin America. He is the author of several handbooks on trade.

Joshua Kroeker is a leading expert in trade finance digitisation. He spent 15 years with HSBC in Canada and Hong Kong developing innovative new approaches to trade finance for corporates of all sizes before collaborating with other banks on the use of emerging technologies such as blockchain to accelerate digitalisation. This led him to co-found Contour along with 8 other banks, and was their Chief Product Officer until the company was sold in late 2023. He is now the Chief Product Officer of Mitigram, a Swedish-based trade finance platform that is transforming not just how trade finance is executed but how the world of trade finance can be expanded through innovative technologies, marketplaces, and the use of digital documents.