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An agreement that will commit almost 100 nations to pass trade digitisation laws is one step closer to fruition after negotiators agreed to a near-final text following eight years of talks.

The World Trade Organization’s Joint Statement Initiative on Electronic Commerce has been under development by 91 countries since 2017 and is designed to set rules for global digital trade.

The so-called “stabilised” text of the agreement released on July 26 contains a provision that all signatories “recognise the importance of facilitating the use of electronic transferable records” and “shall endeavour to adopt or maintain a legal framework that takes into account the UNCITRAL Model Law on Electronic Transferable Records [MLETR]”.

MLETR makes digital trade documents such as bills of lading and bills of exchange legally equivalent to their traditional paper versions. It has already been adopted by a handful of countries including Singapore, the UK and France, but is widely seen as requiring widespread enactment to allow fully digital global trade flows.

The parties to the e-commerce initiative also pledge to “recognise the importance of eliminating paper forms and documents required for importation, exportation, or transit of goods” and are “encouraged to eliminate paper forms and documents, as appropriate, and transition towards using forms and documents in data-based formats”.

The digitisation rules are explicitly designed to apply to national customs authorities, which are seen as hurdles to fully digitised trade because many require importers and exporters to submit hard-copy customs documents and do not have digital systems in place.

Co-conveners of the initiative, Australia, Japan and Singapore, say that the agreement “is set to benefit consumers and businesses involved in digital trade, especially MSMEs”.

“It will also play a pivotal role in supporting digital transformation among participating members.”

The three countries say they will “extend outreach” to all WTO members to explain the benefits of rules for facilitating digital trade transactions.

“Participants will proceed with their domestic processes, with a view to integrating the outcome of negotiations in the WTO legal framework,” the co-conveners say. Making the agreement part of the WTO rulebook will require consensus by all the organisation’s members. The text is still open to amendment.

The 91 participants in the initiative account for just over half of WTO members and over 90% of international trade, the WTO says. Most of the major economies which support the accord, such as Canada, China, Japan, Mexico, Russia and South Korea, have not yet adopted MLETR or similar legislation.

But nine participants in the initiative, including the US, Turkey and Brazil, have not yet agreed to the stabilised text because of “ongoing domestic consultations and considerations”.

India and South Africa have opposed the initiative, mainly because it was an informal negotiation and not part of the WTO’s official agenda, according to a March note from law firm White & Case.

The two countries, along with Indonesia, are also opposed to the ban on tariffs for electronic transmissions included in the initiative.

“While we appreciate that some governments have yet to explicitly back the agreement, the deal nevertheless represents an important milestone in fostering a global environment in which small businesses can fully leverage digital technologies to grow and create new jobs through trade,” says John Denton, secretary general of the International Chamber of Commerce (ICC) in response to the release of the text.

“We encourage all World Trade Organization members to support the expeditious integration of this outcome into the WTO’s architecture – and encourage them to rapidly pursue new discussions on vital digital trade issues not covered by the new text, including the treatment of cross-border data flows.”

The European Commission, while not a direct participant in the talks, says it “played an active role” in the negotiation of the text, which it welcomed as a “balanced, inclusive, and commercially significant agreement”.

It also says the EU is willing to help developing countries implement the accord.

UK business and trade secretary Jonathan Reynolds says “global digital trade is already estimated by the OECD to be worth around £4 trillion and counting but no common set of global rules exist. This is a huge step forward in correcting that and ensuring British businesses feel the benefit.”

Chris Southworth, who has advocated for trade document digitalisation in his role as secretary general of the ICC UK, says the deal “is an opportunity to accelerate efforts to digitalise our borders and global supply chains, and help to remove unnecessary friction and costs that prevent SMEs from trading”.

“This is good news for business, consumers and the economy.”