By Eamonn Ryan
A recent report from the WTO Secretariat delves into the potential effects of artificial intelligence (AI) on global trade, examining how it could create new opportunities for developing economies and small businesses.
Entitled ‘Trading with Intelligence: How AI Shapes and is Shaped by International Trade’, the report explores how AI can help lower trade costs, transform service-based trade, boost the exchange of AI-related goods and services, and shift global economic advantages.
The report also underscores the growing fragmentation in AI regulation, which could particularly impact trade opportunities for small and medium-sized enterprises. It provides insights into governmental measures at domestic, regional, and global levels aimed at promoting and regulating AI.
WTO director-general Ngozi Okonjo-Iweala notes in her foreword: “This report seeks to spark a conversation on how the WTO can support AI development and deployment while addressing its risks and the growing concerns surrounding regulatory fragmentation.”
He adds, “Two key questions this report aims to answer are: how can the WTO help ensure the broad distribution of AI’s benefits? And how can we tackle the challenges posed by AI in a globally coordinated way?”
The report suggests that AI could alleviate trade-related costs in areas such as logistics, supply chain management and regulatory compliance. For example, AI could streamline customs clearance, border control processes, navigate intricate trade regulations, and assess potential risks.
By lowering trade costs, AI has the potential to level the playing field for developing countries and small businesses, enabling them to break down trade barriers and participate more actively in global markets.
In an optimistic scenario, where AI adoption is widespread and productivity increases significantly by 2040, global real trade growth could surge by nearly 14%. On the other hand, a more cautious scenario, with uneven AI adoption and slower productivity growth, suggests a trade growth of just under 7%. Although high-income countries are likely to see the largest gains in productivity, lower-income nations stand to benefit more from reduced trade costs.
However, the report cautions that there is a significant risk of an AI divide emerging between countries and between large and small enterprises, alongside challenges related to data governance and ensuring AI reliability. It also highlights the need for clarity around the intersection of AI and intellectual property rights.
The report emphasises the importance of international coordination to prevent growing regulatory fragmentation regarding AI. It stresses that addressing the digital divide is critical to fully capitalising on the opportunities AI presents.
The full report can be read here.