Countries in the Asia-Pacific region and beyond are intensifying their efforts to digitalize documentation and consider the potential of cross-border electronic data exchange in international trade. This shift has become increasingly prominent in recent years, highlighting the accelerating pace of digital transformation in trade processes.

Such a move towards cross-border electronic exchange, however, raises critical questions for countries: Which documents should be digitalized first? With which trading partner countries should pilot projects be launched? What model of data and document exchange should be adopted, and what are the costs and benefits?

To address these questions, ESCAP has developed a methodology for conducting feasibility studies on cross-border electronic exchange of trade data and documents, as part of its support to the Framework Agreement on Cross-border Paperless Trade in Asia and the Pacific. To date, such studies have been carried out in nine countries across the region, including four Central Asian countries – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – most recently in 2024. These efforts have provided valuable insights to identifying potential areas and informing the next steps for implementation of cross-border paperless trade.

Feasibility study methodology and key insights from Central Asia 

The methodology has evolved over the past years, currently comprising seven steps, as illustrated in the figure below. A mix of primary and secondary research is employed, ranging from stakeholder interviews and surveys to utilization of national reports and data, in addition to ESCAP studies and tools such as the Readiness Assessments for Cross-Border Paperless Trade, Global Survey on Digital and Sustainable Trade Facilitation, and the Cross-Border Paperless Trade Database. 

The first step involves analysing the current use of trade documents and data processing systems. This helps identify potential documents for digitalization, and partner countries to prioritize for establishing electronic exchange. For example, in Kyrgyzstan, 20 trade documents were examined based on the level of automation in their issuance, frequency of use, extent of exchange between government agencies and level of integration with the "Tunduk" interagency information exchange system. From this analysis, the Certificate of Origin was proposed as a priority document for a potential pilot project. Possible partner countries were evaluated using criteria such as trade volume, geographical proximity, political and economic ties, and interagency data exchange, leading to the selection of Uzbekistan as the proposed partner for the project.

Next, the processes for issuing and handling the selected priority trade document(s) are reviewed in detail, taking into account technical capabilities and the legal and regulatory environment. Models are developed to map the current “AS-IS” practices, identify bottlenecks and highlight inefficiencies. For instance, in the case of phytosanitary certificates exchanged between Kazakhstan and Uzbekistan, bottlenecks and pain points included the use of paper-based processes, time costs for handling physical documentation, risks of loss or forgery, and challenges in verifying document authenticity.

Based on such insights, forward-looking “TO-BE” models can be developed to propose optimized processes. For the exchange of phytosanitary certificates, it is recommended that the national information systems of participating countries are connected to the Global ePhyto Hub, to enable automated data exchange. When it comes to the exchange of electronic certificates of origin, the studies emphasized enhancements to the "Single Window" mechanisms of participating countries to facilitate seamless data sharing between national databases. This approach is illustrated below, using the trade case between Tajikistan and Kazakhstan as an example.

Economic feasibility and cost-benefit analyses are conducted to assess the financial impact of implementing potential electronic exchanges. For example, the pilot project proposed in the studies on exchanging electronic certificates of origin between Kyrgyzstan and Uzbekistan was estimated to cost around $200,000. The project would expect to recoup these costs within two years from launch, and to generate economic benefits of more than $600,000 over five years. 

The next step involves evaluating the operational readiness of relevant government agencies to participate in the proposed pilot projects, and determining change management and capacity building needs. Following that, a step-by-step implementation plan is developed, outlining stages such as preparation, system design, pilot launch, monitoring, scaling, and documentation. Each stage includes clear timelines for actions and assigned responsibilities. Importantly, success requires more than just technology – it also depends on updating laws, building infrastructure, and fostering cross-country collaboration to streamline document exchange and enhance regional trade integration.

The final step focuses on outlining opportunities for cooperation and regional integration. This includes understanding the international and regional agreements, frameworks, and mechanisms that countries are involved in, and how they could support pilot projects. Potential donor agencies and developmental partners should also be identified. For the four Central Asian countries studied, engagement through ESCAP mechanisms – such as the Framework Agreement – and with other developmental organizations should be enhanced. 

Importance and relevance

Cross-border electronic exchange of trade data and documents offers transformative benefits for both governments and businesses. Implementing such exchange can significantly reduce financial and time costs, simplify trade procedures, and enhance transparency and predictability in operations. By mitigating risks related to document forgery, a more secure and efficient trade environment can also be fostered. Ultimately, such digitalization initiatives can play an important role in strengthening economic ties among countries, improving trade conditions, and boosting competitiveness in the global market.

The methodology employed in these feasibility studies can be flexibly adapted for use in other countries. By conducting similar studies, governments can identify priority trade documents and partners, determine processes for optimization, and pave the way for future pilot project implementation.