The opportunity to occupy a seat alongside two global giants that history will remember provides a unique and somewhat humbling vantage point — especially when those two brilliant and informed minds see the world very differently. The former president of Mexico, Vicente Fox, and the British UKIP politician and impassioned force behind Brexit, Nigel Farage, recently shared a stage to discuss trade and tariffs — one through a lens of nationalism and the other through the lens of globalism — in front of executive leadership from top grocery manufacturers. It was a charged environment, to say the least, due to the current global climate, and I had the responsibility to serve as the moderator.
Both during the discussion and in my time spent in preparation for it, I was reminded of the volume and complexity of data related to global trade and tariffs. This is not a trivial comment given my time working in dozens of countries during the global expansion of United Parcel Services (UPS). Delving into databases — all containing information gathered by different agencies, countries, companies, industries and interests — there is little wonder why there are so many vastly different ways in which we view the world and how they are likely, at least in part, holding us back.
Today, technology presents so many opportunities to address challenges we have faced in business, government and even society at large for generations. While enjoying a time of innovation and promise, we are also experiencing a time of unrest, uncertainty, misinformation and polarizing disagreement.
As the leader of a technology company, I imagine how technologies like blockchain, with its capacity for global transaction management, tracking, compliance and uneditable truth could contribute to a more informed conversation, understanding and better solutions.
International trade has evoked strong feelings among world and business leaders for a very long time. In 1814, Thomas Jefferson wrote that “merchants have no country.” In 1832, Britain Prime Minister Benjamin Disraeli said that free trade would “Reduce the burdens that so heavily press upon the farmer.” And in the 1990s, Thomas Friedman put forth his Golden Arches Theory of Conflict Prevention that no two countries with McDonald’s restaurants within their borders go to war against each other.
Trade provides an opportunity to connect us and build trust among us. We are in an unprecedented time of peace improvement, but trade also can divide us as the question of what is fair becomes increasingly complex in a growing global market depending on your perspective.
Issues of fairness are inevitable, and they have intensified in the past three years as a more nationalistic voice rose in the West. The United States elected a president whose theme is “America First,” and in the U.K., voters chose to leave the European Union as a result of the Brexit referendum.
This leaves us contemplating the changes and feeling uncertain about the future. Different perspectives and interests will always be a reality, but could we make advancements if all involved were connected to technology that ensured all were looking at the same data, the same source of truth, in which all parties could have confidence?
Spending on blockchain networks is projected to be $2.1 billion in 2018. That is more than double what was spent in 2017, and the projection for 2021 is $9.2 billion. The implications for facilitating more productive discussions and understanding around trade can be transformational. Beyond the obvious uses for payments and tracking, better compliance and better efficiencies are also possible through blockchain.
The use of smart contracts and serialization at the time of production could be used to eliminate tariffs and ensure that trade happens between good global citizens who do not dump subsidized product on the market. If a load of aluminum is serialized as it comes out of the smelters — much like diamonds are serialized — and the load is added to the distributed ledger, the point of origin could be determined by anyone at any time. A country could then demand that the bill of lading for any vessel have the blockchain ID of all products on board. This would allow a country to refuse product from known cheaters and welcome products from good global citizens.
The diamond industry has embraced blockchain to replace the existing paper registries that diamond producers had created to prove the provenance of their diamonds in the face of the public backlash against blood diamonds. And the U.K. is pitching the use of blockchain as a way to create a frictionless Brexit. Tracking everything from the point of origin in a distributed ledger would allow the U.K., in theory, to collect and pay tariffs automatically as goods go back and forth between the U.K. and EU.
As with every technology and solution, there will be bad actors who deliberately try to cheat or find some way to circumvent the system. Governments need to reward individuals and companies that participate and use the systems as intended and, conversely, need to react swiftly and harshly to those that seek to circumvent the system.
Governments should also consider the ramifications this could have on currency-based transactions and the tax base. Savvy producers and consumers will initially try to trade commodities for other commodities on the distributed ledger to reduce “income.” In a hypothetical scenario, a steel manufacturer trades a load of steel to a shipyard for iron ore and carbon that the shipyard acquired for a completed boat. Because no money has traded hands, there are no sales taxes and no registered income.
While many may question the tenor of and tactics deployed during recent trade negotiations, the inability to find agreement and common ground can, in large part, be attributed to the disjointed, unreliable and vast amounts of data. Collaboration among all along the supply chain and in governments to use the capabilities technology affords just may lead to a global trade environment that accomplishes all that it promises — prosperity, cooperation and interdependencies that serve the greater good and leverage the strengths of all — something about which even Farage and Fox might find it difficult to disagree.
This post was originally published on forbes.com