Is the Electronic Trade Documents Act 2023 Sufficient to Promote the Uptake of Paperless Trading Systems?

In September 2023, the Electronic Trade Documents Act (ETDA) came into force in the UK. It aims to facilitate paperless trade by allowing certain trade documents in electronic form to have the same legal functionality as their paper counterparts. The question this article poses is whether the ETDA, and similar legislative initiatives in other countries, suffice to promote effectively the digitisation of trade. By analysing the mechanics of the ETDA and its practical application, this article develops a clear thesis on the impact of enabling legislation on the digitisation of trade. This article adopts the view that different aspects of the ‘membership requirement’ have constituted the main obstacles to the widespread adoption of paperless trading systems. It demonstrates that the ETDA, which requires the use of a reliable system to ensure that a document in electronic form qualifies as an ‘electronic trade document’, does not necessarily address the requirement that all parties to a transaction involving electronic trade documents must become members and use a paperless trading system. It concludes that legal recognition of electronic trade documents is necessary but insufficient to incentivise the broad uptake of such systems, unless a standardised framework of governance ensures that reliable paperless trading systems are legitimised and become trusted by commercial parties.