Digital Trade Dialogues: Spotlighting the Pacific Islands
eTrade Alliance Pacific Islands Policy Dialogue
By Morgan Wilsmann
The Pacific Islands Forum Secretariat (PIFS) and USAID’s Alliance for eTrade Development II (“eTrade Alliance”) held their first Pacific Islands Digital Trade Dialogue on March 4th, 2022, to discuss ongoing efforts to enable Pacific business to engage in digital trade, and develop potential pilot ideas to regional ecommerce development. Panels discussed 1) best practices, solutions, and new ideas for Micro Small and Medium Enterprises' (MSMEs) ecommerce capacity-building, 2) enabling Pacific Island entrepreneurs’ cross-border payments, and 3) enabling cost-effective cross-border and last-mile logistics.
Welcoming remarks were made by Henry Puna, Secretary General of the Pacific Islands Forum, as well as Regina MacKenzie, Acting Deputy Mission Director at the USAID Mission to the Pacific. Secretary General Puna set the stage for the Dialogue by introducing the Pacific Regional Ecommerce Strategy and Roadmap, the first regional strategy with buy-in from Forum trade ministers following extensive consultations with regional and international partners.
The objective of this Dialogue, as stated by Mr. Puna, was “to accelerate implementation of the Pacific Regional Ecommerce Strategy and Roadmap by exploring evidence to mobilize American multinationals engaged in ecommerce policy areas to act as enablers of the Pacific digital journey. From digital payment systems, to cross-border and last-mile logistics, to ecommerce skills, progressive partnerships between multinational companies and Pacific enterprises can address the most binding constraints which prevent entrepreneurs from capitalizing on their true potential as digital trade champions.”
Following Mr. Puna’s opening remarks, Ms. MacKenzie applauded the Pacific Islands Forum for their operationalization of the Pacific Regional Ecommerce Strategy and Roadmap, as well as the Pacific Island Governments for their initiatives to promote ecommerce in their economies, and the corporate partners in the eTrade Alliance and their efforts to lift especially women-led firms to access ecommerce globally.
Noah Kouback, Programme Advisor of the Pacific Islands Forum, presented the Pacific Regional Ecommerce Strategy and Roadmap. The Pacific Islands Forum is working with the eTrade Alliance to identify pilot projects that can enable ecommerce, notably in areas where partnerships with Multinational Corporations can be beneficial.
Kati Suominen, the Founder and CEO of Nextrade Group and the Technical Director of the eTrade Alliance, presented the eTrade Alliance’s role as a public-private partnership aimed to enable developing country MSMEs to engage in trade. She discussed the Alliance’s workstreams on improving the enabling environments for ecommerce, MSME skills development for ecommerce, logistics and last-mile delivery, access to finance, and inclusive trade, and she also substantiated the Alliance’s work with data on the impacts of ecommerce use on MSMEs’ exports, growth, and profit margins and for leveling the playing field between women- and men-led firms.
Panel 1: best practices, solutions, and new ideas for Micro Small and Medium Enterprises (MSMEs) ecommerce capacity-building
Janet Lotawa, Founder of Rise Beyond reef – a Fiji based small business – provided insight on common struggles faced when expanding ecommerce capabilities in the Pacific: "Most pacific businesses are disqualified from the race because they can’t access major platforms like Amazon or Shopify”. Even though digital payment systems like Paypal are integrated on some online marketplace, buyers face long processing times. Other payment systems, like Stripe, simply do not work in countries like Fiji. Without digital payment options, doing business online is out of reach. The very basics are not possible for majority of businesses."
Panel one, Moderated by Zarak Khan, Director of Programmes and Initiatives at the Pacific Islands Forum Secretariat, explored best practices, solutions, and new ideas for MSME ecommerce capacity building. Panelists included two small business founders, Matt Simpson of Green Banana Paper and Janet Lotawa of Rise Beyond the Reef, who provided insights on the struggles to expand ecommerce as a result of insufficient digital skills training and lack of digital solutions. Glynis Miller, Trade Commissioner of Pacific Trade Invest, summarized the gaps in digital skills faced by MSMEs in the region. Erica Libertelli, Executive Director of the eCommerce Institute, provided insights from building the ecommerce skills of over 200,000 sellers in Latin America, and offered suggestions to how those capacity building initiatives may be replicated in the Pacific Islands.
Panel 2: enabling Pacific Island entrepreneurs’ cross-border payments
Anthony Watson, Country Manager to New Zealand and the South Pacific for Visa, addresses the barriers to the adoption of ecommerce marketplace for Pacific Businesses to sell online and trade globally: "There should be collaboration among policymakers as well as local fintech companies and global ecommerce businesses to help enable MSMEs in the Pacific rather than build everything from the ground up.”
The second panel -- moderated by Ajay Jagannath, Regional Technical Specialist for the United Nations Capital Development Fund -- explored how to enable Pacific Island entrepreneurs’ cross-border payments. Anthony Watson, Country Manager for New Zealand and South Pacific for Visa Inc., discussed Visa’s initiatives to improve digital payment systems. In response to an inquiry on how to improve interoperable payment systems in the region, Mr. Watson provided two perspectives on how Pacific Islands businesses can work with Visa: 1) working with financial institutions in the region to issue debit cards to both individuals and MSMEs and 2) enable businesses to access global consumers through tap-to-phone and access to e-marketplaces. Tap-to-phone enables small businesses to access the Visa network to accept contactless payment options with their smartphones.
Panelist Craig Kirkland, Director of the Pacific Islands for Mastercard, addressed cross-border payment charges as one of the biggest hindrances to cross-border transactions. Banks play a crucial role in facilitating access to payment gateways. Visa and Mastercard both partially funded the integration of digital payment systems for banks. Now, Mastercard is working with MSMEs to help them make the most of their payment services – particularly benefitting the tourism industry so that international visitors that may not have cash may still transact as they walk through physical markets. To remove barriers to digital trade from the data security perspective, Mr. Kirkland also plugged the dissemination of 3DS, an online card payment authentication technology that lowers digital transaction and fraud risks.
Finally, Truman Bradley, CEO of Fintech Pacific, gave the perspective of a regional start-up hoping to provide digital solutions to the Pacific’s payment challenges. Regarding digital payments, regulations can be prohibitively rigid. For Mr. Bradley, the government is improving the regulatory environment by enabling businesses to participate in sandbox policy experiments. As a small fintech company wanting to disrupt the market as an alternative to Mastercard and Visa, sandboxing allows businesses like Fintech Pacific to get a proof of concept, show the government what they are capable of doing through sandboxing, and influence the regulatory environment.
Panel 3: enabling Pacific Island entrepreneurs’ enabling cross-border and last-mile logistics
The final panel was moderated by Bill Gain, Global Lead of Trade Facilitation, Customs Reform, and Border Management at the World Bank Group. Setting the stage for discussing enabling cost-effective cross-border and last mile logistics, Mr. Gain opened the panel with a plea to logistics providers, exporters, and policymakers to work through potential solutions to delivery constraints.
Toleafoa Nella Tavita-Levy, Assistant CEO of Trade at the Ministry of Foreign Affairs and Trade in Samoa, provided insight on why ecommerce is important for her country. As the only government agency participating in the event, Ms. Tavita-Levy provided an important perspective on how the public sector is advancing ecommerce innovations. She provided insights from the first etrade assessment that occurred in 2017, which gave recommendations on how Samoa can progress ecommerce.
Patrick Killoran, owner of Banz Kofi, a coffee distributor based in Papua New Guinea, noted that when it comes to exporting coffee, key challenges include restrictive permitting requirements, and inconsistent transportation infrastructure within the country. Further, border customs within the Pacific can be disorganized, especially when verifying product certifications. Mr. Killoran emphasized the need to become a “one Pacific," rather than a collection of separate countries. Combining and streamlining cross-border logistics will bolster trade for the whole region, and make the Pacific Islands more attractive to international actors.
Sarvesh Devan, Country Manager of Fiji and Pacific Islands for DHL, discussed challenges that DHL is experiencing in the Pacific. Shipment visibility, real time tracking, flexible delivery options, and safe transport of packages is becoming increasingly possible thanks to DHL. However, a great challenge for DHL is the lack of awareness of delivery logistics among MSMEs that want to engage in cross-border trade. Also, a lot of businesses sell socially, and are otherwise unfamiliar with border regulations that may hinder trade.
Jacqueline Rajuai, Geo Program Manager for Google Plus Codes, discussed the potential for digital addresses to accelerate the last-mile delivery of ecommerce shipments and enable delivery services over vaster territories in developing nations, helping MSMEs to sell to a broader clientele. With some 2 billion people lacking addresses worldwide, digital addressing solutions are gaining momentum, but there remains some misunderstandings around whether digital addressing replaces formal addresses. In reality they work together to ensure high levels of accuracy, as evidenced in various Plus Codes pilots in India, Kenya, Brazil, the United States, and many other markets.
The panel worked through a potential pilot in the Pacific Islands to improve last mile logistics. Google Plus Codes have had initial discussions with regional ecommerce companies to implement Plus Codes technology solutions that are easily adopted by customers. The pilot should work with both ecommerce customers and also the government agencies that can help streamline the technology across platforms. Ms. Tavita-Levy, representing the government perspective, sees that pilot as a way to improve trade logistics and facilitation following recommendation of the 2017 eTrade assessment.
Zarak Khan closed the event stating that the webinar provided a convincing case for why including multinational corporations are integral to the digitization of Pacific Islands cross-border trade. He also underlined the importance of the Pacific Regional Ecommerce Strategy and Roadmap as probably the first documents endorsed by Forum ministers, that provides specific guidelines on how multinationals can foster digital trade in the Pacific. Mr. Khan welcomed the fact that the eTrade Alliance partners like DHL, Mastercard, Google, and Visa are exploring exciting pilot projects in the region, and will use the takeaways from this event to inform their approaches to improving the ecommerce ecosystem in the Pacific Islands.
The agenda for the event came be found here.