Global trade moves at digital speed. Can the law keep up?

A business can sell a product across the world with a few clicks. Money can move between countries in seconds. Contracts can be negotiated across continents and signed electronically. Digital assets may exist without any obvious physical connection. Yet the legal rights behind these transactions do not automatically cross borders with them.

What happens if an international contract ends in a dispute? Which country’s courts can hear the case? Will the parties’ choice of court be respected? Will the law chosen by the parties to govern the contract be honoured? Can a court judgement be enforced against assets held in another jurisdiction? Can an official document issued in one country be used in another? And as commerce becomes increasingly digital, which law governs a digital asset or electronic trade document moving between jurisdictions?

These may appear to be questions for lawyers, but they are fundamentally economic questions. Legal friction is economic friction.

Uncertainty, lengthy procedures and cross-border enforcement hurdles all have a price. Large multinationals are more likely to have the resources and networks to overcome them. Small and medium-sized enterprises often do not. For them, legal friction can become a real barrier to entering foreign markets or enforcing rights.

Reducing that friction makes trade more accessible, predictable and inclusive. And it requires something the global economy increasingly depends on: legal interoperability.

Much like in technology, legal interoperability does not rely on identical systems, but on common standards that allow different systems to work together. Countries have different legal traditions and policy choices; international commerce requires reliable connections between them, not a single global legal system.

At the Hague Conference on Private International Law (HCCH) our work centres around this exact challenge. Since 1893, we have developed international treaties, known as HCCH conventions, that create common rules and mechanisms for cross-border situations. When states join our conventions, they connect their legal systems while retaining their own national laws.

Today, HCCH frameworks connect 158 States and the European Union through more than 1,000 treaty actions – each representing a decision by a state or the European Union to join an HCCH Convention. The principle is simple: connect legal systems where necessary while respecting their differences.

Translating legal interoperability into economic reality relies on targeted international instruments that handle key friction points.

For example, two companies may agree on which country’s courts will resolve a dispute, but what matters economically is whether that choice is respected – and whether the resulting judgement is enforceable where the counterparty’s assets lie. A ruling that stops at the border has little practical value.

The HCCH’s Choice of Court and Judgments Conventions make these outcomes predictable, ensuring that legal decisions can cross borders alongside the business transactions they cover. These treaties complement, rather than compete with, arbitration and mediation, forming a broader triptych of international dispute resolution mechanisms tailored to different commercial needs.

Beyond dispute resolution, HCCH frameworks streamline everyday cross-border administration by helping courts gather evidence and deliver legal documents internationally. The 1961 Apostille Convention, for example, replaced lengthy authentication chains with a single certificate. Today, it connects 130 contracting parties and is used tens of millions of times each year, with certificates increasingly issued and verified online through the electronic Apostille Programme (e-APP).

These mechanisms rarely make economic headlines, but by making legal outcomes portable, they reduce costs, delays and uncertainty every day.

Technology can remove geographical barriers, but not differences between national laws. Electronic trade documents, digital tokens and emerging forms of digital money can cross borders rapidly, while basic questions remain: which court has jurisdiction; which law applies; how will rights be recognized elsewhere?

The HCCH is adapting existing frameworks to the digital environment while addressing new questions created by digitalization. Current work includes electronic transferable records, digital tokens and the cross-border legal implications of central bank digital currencies. Existing frameworks are also being digitalized through electronic Apostilles and registers, electronic transmission of documents, and technology-enabled service and taking of evidence.

The aim is legal certainty that allows innovation to operate reliably across jurisdictions. Digital interoperability without legal interoperability is incomplete.

Together, these 1,000-plus treaty actions create a multilateral network that would otherwise require more than 33,900 separate bilateral agreements to reproduce – a striking multiplier effect of multilateral cooperation.

Behind the scenes, these frameworks reduce duplication and create predictable channels for cooperation: documents and judgements can cross borders, evidence can be obtained elsewhere and businesses can rely more confidently on contractual choices.

The network remains incomplete. Every additional state that joins and implements these frameworks strengthens the system. Expanding participation is therefore part not only of the legal agenda, but also of trade facilitation, investment and competitiveness.

Governments, businesses and international organizations rightly devote enormous attention to physical connectivity and digital transformation. Equal priority must be given to the invisible legal infrastructure that allows those networks to function safely across borders.

The goal is not a single global law, but a system where national legal frameworks work together predictably and efficiently. Achieving this requires integrating legal interoperability into mainstream policy conversations on trade, supply chain resilience and digital governance.

If goods, services, capital and data are to move seamlessly in a globalized economy, the legal systems supporting them must connect as well. Legal friction is economic friction – and reducing it is essential to building the infrastructure of modern trade.