EDI Crucial to growth of international Trade

Nations, like individuals, buy and sell goods and services. Recent international developments, such as the imposition of economic sanctions on several nations have highlighted the importance of international trade.

IT is a main contributor to the changing face of international trade. Today it is possible to transact totally on-line. However, whether such technology is used to its fullest extent is hard to say.

But there certainly are nations, even in Asia, which are trying to move to higher plains in international trade. These countries use technology, particularly IT, extensively.

For technology to be successfully implemented in this sector, vast computer-based networks spreading across continents are important. There are several companies, including computer vendors, who provide international information networks to carry messages and transactions worldwide.

One such organisation is Value Added Data Services (VADS) Malaysia Sdn. Bhd., a joint venture between Telekom Malaysia and IBM Malaysia.

“For years, the governments and trade associations of the world have been diligently stadardising and harmonising the trade documents and procedures which are so essential to international trade.

The standardisation of trade documents, the elimination of trade barriers and the promotion of simplified trade procedures have been the full-time job of such organisations as the National Council for International Trade Documentation in the US, the Simplification of Trade Procedures Board in the UK, SIMPRO in France, Deupron in Germany, Swepro in Sweden, and Finpro in Finland,” said VADS marketing manager Dzulkifli Mokhtar.

In Malaysia, the National Trade Facilitation Board has been working with the United Nations in introducing an Aligned Documentation System. This paper-based system is seen as a first step towards the implementation of EDI.

In Singapore, the national EDI network has been in place for some years and has scored successive victories in providing value-added service to the island’s traders—both domestic and international.

According to Mr. Dzulkifli, EDI provides an economical and efficient tradeing system as conventional paper-based international trading systems take up a lot of time in data entry activities. Using EDI internationally can overcome issues related to time and distance. It can also reduce the language problems traders face.

“If we look at the Single Market in Europe, the member countries have systematically removed trade obstacles. Countries there are deregulating trade and communication barriers. Already, several countries such as the UK and Germany have got a headstart in removing barriers and opening up trade.

“The elimination of laws which made it illegal for information networks to compete with the local telecommunication organisation has made it possible for information network providers to set up operations in the EC and provide critical inter-country communication systems for international EDI”, he said.

EDI developments in this region have been mainly government driven. Singapore’s TradeNet was introduced as a strategic initiative under the government’s national IT plan. In Hong Kong the Spedi (Shared Project for EDI) effort will be undertaken by the 11 member business consortium Tradelink. In Korea, the Korea Trade Net (KTNet), established by the Korea Foreign Trade Association (KFTA) will be operational by mid-1993.

DACOM and some 30 US and Canadian retail firms are participating in the so-called Pacific Rim EDI to facilitate the testing and installation of products from Korean manufacturers.

In Taiwan, the Institute for Information Industry (III) has mapped out a 4-year strategy for an EDI trading and customs network, with the first phase (for air cargo clearance) to be launched by December 1992.

Another area where IT can be extensively applied to improve international trade is the setting up of international databases.

Some examples of such databases are the South-South Investment and Technology Data Exchange Centre (Sitdec) being set up by the Group of Fifteen countries led by Malaysia. ASEAN has several databases on tourism and the travel trade, and member countries are talking about a regional EDI network that will link the national networks.

More recently, IT vendors from the Asia-Pacific region got together to discuss trade relations among themselves. The Asia-Oceania Computing Industry Organisation (Asocio) has decided that it will install an EDI-based international network that will offer electronic trading opportunities and international databases. Australia and Singapore and expected to enter a pilot programme soon.

Mr. Dzulkifli added, “I believe technology will become less of an issue. Economic forces leave every nation no alternative but to invest in IT infrastructure. Competition in a world economy is intense. Labour costs are escalating. But the cost of telecommunications and computers have dropped significantly. Governments already see the competitive element in hosting industries that are compute-intensiver ather than labour-intensive.”

Other important issues that need to be addressed are international trade laws, trans-border information flow, privacy and ecryption restrictions.

—K.M. Raj Kumar

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