The European Parliament (EP), the parliamentary institution of the European Union (EU), published a resolution yesterday, December 13, titled "Blockchain: a forward-looking trade policy." Within the resolution, the EP sets up how blockchain technology could be used to improve EU trading policies and calls on the European Commission (EC), the EU's executive branch, to "take the lead in the assessment and further development of blockchain technologies."
The legislative body notes that the estimated €16 trillion trading supply chain sector suffers from "burdensome paperwork" and a complex processing system that is susceptible to error. By introducing blockchain technology to EU trade policies, the EP hopes to improve transparency and traceability throughout the supply chain, streamline customs checks, and raise the level of trust importers and exporters have in the system, specifically the EU's free trade agreements (FTAs).
The resolution explains that only 67 percent of EU exporters and 90 percent of EU importers use the EU's FTAs, which grant EU traders access to non-EU markets, and vice-versa. By using applications underpinned by blockchain, traders would be able to upload all their documents to a public authority that would grant qualifications for preferential FTA regulations based on the received information.
The EP believes blockchain implementation can also benefit small- and medium-size enterprises (SMEs), allowing the traders to "internationalise" and overcome exporting costs. Along with introducing SMEs to peer-to-peer communication, the EP wants to utilize EDCCs (aka smart contracts) to help reduce the risk of non-payment issues.
The EC was also asked to research security issues related to blockchains, and to undertake actions to address them. The EP stated it recognizes that outside of the EU's trade policies, "the application of this technology may present risks of money laundering and facilitate the financing or organised crime." Regarding EDCCs, the EP feels that "at the moment, smart contracts may not be sufficiently mature to be considered legally enforceable within any sectoral regulation and further assessment of risks is needed."
In February 2018, the EC launched its Blockchain Observatory and Forum, which works toward aiding Europe research and utilizing blockchain technology. In August, ETHNews covered the Observatory's inaugural thematic report, "Blockchain Innovation in Europe," which highlights blockchain innovation within the EU, the EU's blockchain strengths and challenges, and emerging priorities related to blockchain development in the EU.