💡 Who this is for: Those working on trade digitisation, digital product passports, supply chain traceability and trusted product claims.
Definition: Trade credentials are portable, verifiable digital records about products, shipments or transactions. The UN Transparency Protocol (UNTP) provides common specifications that help them work across different systems.
Why it’s important now: Global trade is worth upwards of US$25 trillion annually, yet at least US$6 trillion in trapped and potential value remains across border friction, unmet trade finance, illicit trade and product attributes that cannot carry value in the market. More interoperable, verifiable information could help unlock value.
Global trade has been digitising for decades. Yet trillions of dollars in potential value remain trapped in border and regulatory friction, constrained access to trade finance, illicit trade, duplicated processes and product claims that cannot easily be verified or rewarded in the market.
Why has so much digitisation left so much value on the table? Well, as it turns out, one of the assumptions underpinning trade digitisation may be wrong.
Systems exchanging trusted data do not always need to be directly connected. The proof is already familiar to international travellers: the passport.
When Every Connection Creates Another Connection
Much of trade digitisation has been based on a logical idea: connect two systems and allow them to exchange information in a consistent digital format.
A commercial invoice is exchanged between a buyer and seller, but its information may also be needed by a chamber of commerce issuing a certificate of origin, a bank providing trade finance, customs authorities, brokers, freight forwarders and other participants. One analysis suggests that a single commercial invoice may touch as many as 17 parties during one international trade process.
Those parties use different systems and operate at different levels of digital maturity. Point-to-point connections grow into networks of service providers, hubs and intermediaries, adding cost, governance friction, duplicated data and concentrated cyber risk. Even then, structured data can end up as a PDF, printout or fax, or be manually re-entered into several forms.
The Passport Success Story
Yes, international travellers exchange high-integrity digital information between complex systems across borders every day without every participant connecting directly to the passport authority in the traveller’s home country.
At a SmartGate, another country’s system can read the passport chip and verify its data. A person can also read the passport, compare its photograph with the traveller and inspect its visible security features. The same passport can then be used to confirm the traveller’s identity at a hotel or car-hire counter, even though those businesses have no direct integration with the issuing country’s passport system.
The person is the carrier of the information. Participating countries agree on minimum standards for the passport and its chip, while retaining authority over how passports are issued. They also adopted electronic passports progressively, without waiting for every country to implement the technology.
When the Good Becomes the Carrier
Translated to trade, documents and product information can be represented as portable, verifiable credentials that travel with a product or consignment. The good becomes the carrier of the data.
A digitally mature organisation could ingest and process the structured data automatically. A participant with fewer technical capabilities could read the same information in a human-readable form.
The same credential could serve different participants without requiring them to join one platform or replace systems that already work. One organisation, industry or jurisdiction could begin without waiting for the entire trade ecosystem to move at once.
A Digital Product Passport Is Only One Credential
The passport analogy may suggest digital product passports but hang on just a moment: a digital product passport is only one type of trade credential. A trade or shipment may rely on linked credentials covering products, facilities, traceability events, conformity assessments and documents such as invoices, waybills and certificates of origin.
Simply issuing a digital product passport doesn’t solve the interoperability problem. If every organisation creates its own version of a DPP without a common foundation, the same problem rears its head again.
This is where a protocol approach becomes important.
Protocol Not Platform
A protocol approach does not require every participant to use the same platform, internal data model or commercial process. Global trade is too diverse for one system to accommodate every industry, regulatory and business requirement.
Instead, the UN Transparency Protocol, or UNTP, defines common, repeatable patterns for representing product, facility, traceability and conformity information as verifiable credentials, creating a lightweight shared foundation. Industries, ecosystems and businesses can extend it for their own requirements without breaking the underlying interoperability and verifiability. Existing solutions can continue to coexist and pursue different commercial aims.
From Portable Information to Economic Value
Following this protocol approach can protect existing technology investments and allow adoption to happen progressively. Portable credentials can reduce repeated collection, translation, verification and re-entry of information, along with the resulting cost, delay and friction. They can also support trade finance, revenue compliance and the ability of products to capture the value of credible attributes such as provenance, quality and sustainability.
The protocol does not deliver those outcomes on its own. Communities must decide which problems matter, which claims need to be carried and verified, and how to apply the shared foundation.
For example, a country that has invested in lower-emissions steel might prioritise the validation of green steel claims. Government, steel producers and the construction sector could agree on the credentials and evidence needed to substantiate emissions intensity, provenance and conformity, helping those products meet procurement requirements and command value in the market.
Another community might prioritise food safety, ethical sourcing or recycled content. The problems differ, but the shared foundation allows the resulting credentials to remain interoperable.
The technology provides repeatable building blocks. Value is realised when communities use them to make trusted information easier to move, verify and reuse. As interoperable implementations spread, the benefits can compound across industries, supply chains and borders, releasing value that decades of trade digitisation have left trapped in the system.
Discuss This Topic
There’s more to it than can be described in a brief blog post, that’s for sure. If you have questions or want to dive into something further, head over to the Pyx Forum to discuss.