Globalisation is often a catch word used as a reference to the ever-increasing amounts of international connectivity, communication, and exchange of information. In terms of trade however, the globalization of entire industries of the global economy has resulted in an exceptional paradigm shift: now more so than any other time in human history, the average consumer has immediate access to a large and diverse amount of goods shipped from all over the world. In a recent article by Foreign Policy, it was estimated that merely 100,000 large freight ships, “transport close to 90% of the world’s trade.” This evolving dynamic, unforeseen three decades ago, has tremendously changed the nature of international trade as new products, new competition, and large amounts of capital have flooded old and emerging markets alike.

Ambrosus, positioned as a next-generation industrial grade supply chain solution, promises a new layer of transparency and accountability for global supply chains that will radically improve international trade efficiency. Equipped with a decentralised public blockchain alongside cutting edge IoT devices, Ambrosus can capably allow companies to surpass food and health safety measures, export checks, and shipment quality standards. As the most holistic solution to supply chain congestion, Ambrosus sits at the forefront of the future of international trade.

Understanding International Trade:

In response to the sudden shift in global connectivity, countries have increasingly looked to forms of international mediation as a way of guaranteeing effective and successful trade practices. More specifically, this concerns the use of the World Trade Organization (WTO) — an inter-governmental organization that regulates international trade. Through the WTO, countries have the opportunity to register complaints or action against other countries for failing to abide by agreed-upon trade practices. Governments, in turn, have the opportunity to impose special measures on the trade of certain products, as a matter of protecting their own industries.

Within the context of the WTO, a substantial amount of regulation, import controls, quotas, and non-tariff measures (NTM’s) have been used by countries especially keen to monitor the food products, medicines, cosmetics, and textiles entering their borders. The underlying motivation for such practices centers upon protecting national industries from outsourced competition, while also maintaining standards for the quality of products that are imported into the country. As a result, less developed countries and emerging markets often times stand to lose potential business due to stringent non-tariff measures that demand product quality be proven.

Ultimately, there are two fundamental challenges for countries in the international trading arena: 1) Amidst the large number of measures, regulations and barriers to trade, quality businesses and companies are often left out of the global trade arena due to their geographical location and impeding stereotypes about product quality. 2) At the same time, companies who produce poor quality products or medicines, are able to ‘game’ the system and send a less-than quality product to another country. Ultimately, an unfair and negative state of affairs currently exists: Fair business, suffering from a lack of transparency in the global trade arena, is punished, while unfair business, benefiting from a lack of oversight, is able to flourish.

Ambrosus and International Trade:

Importantly, Ambrosus possesses clear solutions to these two fundamental challenges. In a clear, efficient, and intuitive manner, Ambrosus compacts supply chain data recorded with smart devices and smart containers onto its own public blockchain. Open to consumers, governments, and companies alike, Ambrosus provides a data management solution to the most difficult international trade barriers. As a holistic solution, Ambrosus will allow for quality products to enter completely new markets, while also raising industry standards to expose products that are fraudulent or counterfeited.

Ambrosus: Proving Product Quality

To begin with the first problem, Ambrosus greatly increases a company’s ability to demonstrate their products’ quality, and thereby gain access to a new market. The need for this type of solution is demonstrated in an article discussing food traceability and safety, whereby a pertinent consideration is put forward by the authors:

“There are often problems of accepting testing, monitoring, and certification results, especially from developing countries. Several cases are known where tested products from developing countries are not accepted by the exporting country.” (4–5)

The article goes on to detail how for developing countries, up to 50% of their agro-business stems from the export of certain commodities. These commodities, connected to the international supply chain, are then bought and used by hundreds of various multinational companies around the world for very specific products.

To get a better idea of exactly how global trade in food and commodities operates, a number of detailed maps and graphics can help explain the international landscape. As Ambrosus is a Swiss based company, the first graphic details the breakdown of products in Europe and whether they come from domestic or imported sources.

Source: World Economic Forum

This graphic shows that the largest amount of foods that are imported concern animal products, sugar, nuts and other commodities, as well as fruits and veggies, and oil crops — all industries that Ambrosus has built solutions for.

For each and every type of product in the importer category, very specific health standards and trade barriers must be met in order to gain entry to the European Union. This is especially the case for meats and other livestock, as the EU has specifically set traceability standards for all beef products concerning the location of where the cow was raised, as well as a reference number that can account for it on a specific farm.

For developing countries, the challenge is a matter of finding new and creative ways of passing beyond the barriers imposed by a target country. The same article details the imbalance currently at hand:

“Whilst developing countries have gained an increasing share of global trade in fish and fishery as well as horticultural products, there is evidence that exporters are facing growing challenges meeting food safety requirements in industrialized countries.” (7)

The author then continues to discuss how the European Union specifically, has very particular “hygiene standards” set for each stage of the supply chain process. Due to this, “Each processing industry in the producing country must be individually inspected and approved by a specified ‘Competent Authority’ which again will be regularly checked for its compliance and satisfactory performance by the European Commission”.

In terms of the World Trade Organization, a number of countries have expressed concerns over inefficiencies and problems that their products face when entering new markets. The graph below illustrates the main frustrations of exporting countries:

As the report goes on to explain:

“Measures within the category of ‘inefficiency or obstructions’ were the most numerous of the procedural obstacles, followed by those of ‘arbitrariness or inconsistency’ for the majority of exporting firms.” (17)

That is to say, that a lack of clear documentation or paperwork, alongside unclear guidelines for dealing with certain products, greatly affect an exporters’ opportunity to break into a new market. Out of all of the industries that participate in global trade, “the top four sectors facing the largest numbers of non-tariff measures (NTMs) were the textile, leather, electrical and electronic goods and food industries.”

Ultimately, a lack of data optimization alongside a clear distrust in certain products or brands has led to a congested and inefficient trade arena. Large import barriers center upon a lack of efficiency, and high product standards inhibit large companies from effectively selling their products.