EU’s Free Trade Infrastructure Needs a Lift From Blockchain

EU’s Free Trade Infrastructure Needs a Lift From Blockchain

The European Parliament has published a document ‘Blockchain: a forward-looking trade policy,’ which continues to push forward the adoption of DLT in EU trade.

As a provisional resolution, the document sets out a scenario by which the free trade agreements (FTAs) currently enjoyed by member states could be used to bolster blockchain technology. The document states:

“EU FTAs have large untapped potential and have yet to be fully utilized. Blockchain has the potential to support the TSD agenda by providing trust in the provenance of raw materials and goods, transparent production processes and supply chains.”

Although no policy changes are suggested, the EU resolution does advocate a set of guidelines by which blockchain might provide industry, customs, and regulatory authorities with a degree of legal certainty. The resolution wants more clarification on how economic efficiency can be legally enhanced across Europe supply chain and infrastructure logistics. The document states:

“The EU has an opportunity to become a leading actor in the field of blockchain and international trade, and that it should be an influential actor in shaping its development globally, together with international partners.”

The resolution noted that FTAs in the EU was underutilized with only 67 percent of EU exporters and 90 percent of EU importers making use of the preferential tariffs. It emphasized that blockchain could help improve these trade policies.

Last month, the formation of  “Blockchain for Europe” association was revealed, naming Ripple, NEM, EMURGO/Cardano and Fetch.AI as founding members.

A Finextra press release describes the association as “the first credible attempt” to establish a “unified voice” for the European blockchain industry. It argues that policy debates are “fragmented – with inconsistent information from those outside the blockchain sector challenging consensus within it.”

The four members of Blockchain for Europe are taking it upon themselves to educate EU and member-state institutions on the “true nature and potential of the distributed ledger (DLT) and blockchain technology.” Like many of the associations before it, Blockchain for Europe echoes concerns with regards to regulations and desires to establish ones that promote innovation in the region.

Also, four major European banks recently used R3’s Corda platform to create a live transaction for their Euro Debt Solution.

The banks, Commerzbank, ING, Natixis, and Rabobank have adapted blockchain technology, according to a new Banking Tech report, by finding a solution to minimize operational costs and risks using R3. Corda is a distributed ledger platform that is the outcome of over two years of intense research and development by R3 and 80 of the world’s largest financial institutions.

This month seven EU member states signed their own declaration calling for the promotion of DLT’s use in the region. The declaration was co-signed by Malta, Italy, France, Cyprus, Portugal, Spain, and Greece.

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