Geneva: Artificial Intelligence (AI) can help automate and streamline customs clearance processes and border controls, navigate complex trade regulations and compliance requirements, and predict risks, a new report published today by the World Trade Organization (WTO) Secretariat says.
The report argues that AI can help to overcome trade costs associated with trade logistics, supply chain management and regulatory compliance. Lower trade costs can help level the playing field for developing economies and small businesses, helping them to overcome trade barriers, enter global markets and participate in international trade,
The report, entitled “Trading with Intelligence: How AI Shapes and is Shaped by International Trade, ” discusses how AI can increase trade in AI-related goods and services and redefine economies’ comparative advantages.
The rise of AI is raising important data governance issues that must be addressed to prevent further digital trade barriers. Cross-border data flows are essential to AI, as vast amounts of data are needed to train AI models, as well as minimize possible biases. Thus, restrictions on data flows can slow AI innovation and development, increase costs for firms, and negatively impact trade in AI-enabled products. A recent study (OECD and WTO, 2024) found that if all economies fully restricted their data flows, this could result in a 5 per cent reduction in global GDP and a 10 per cent decrease in exports. However, the large datasets required by AI models raise significant privacy concerns. Therefore, a reasonable trade-off between accessing large amounts of data to train AI models and protecting individual privacy must be found.
As artificial intelligence is set to shape the future of international trade, the report examines key trade-related policy considerations raised by this technology and discusses the critical role of the WTO in facilitating AI-related trade, ensuring trustworthy AI, and promoting global regulatory convergence.
The report discusses the potential impact of artificial intelligence (AI) on world trade and also highlights the increasing fragmentation of approaches to AI regulation, which may have a particular impact on trade opportunities for micro, small and medium-sized businesses. It provides an overview of government initiatives taken at the domestic, regional and international levels both to promote and to regulate AI.
WTO Director-General Ngozi Okonjo-Iweala says in the report’s foreword: “This report aims to stimulate a discussion on how the WTO can promote the development and deployment of AI and help mitigate its associated risks and looming concerns about regulatory fragmentation. In this respect, two guiding questions the report tries to address are: how can the WTO help ensure that the benefits of AI are broadly shared? How can the challenges that AI presents be addressed in a globally coordinated manner?”
Ensuring that AI is trustworthy without hindering trade can be challenging. “AI trustworthiness” means that it meets expectations in terms of reliability, security, privacy, safety, accountability and quality in a verifiable way. However, given the behaviour and opaque nature of AI systems, as well as the potential dual-use of some AI products (i.e., for both civilian and military applications), striking a balance between ensuring that AI is trustworthy and enabling trade to flow as smoothly as possible may prove especially challenging.
The evolutionary nature of AI makes regulation a perennial moving target. “Traditional” regulations and standards for goods, which normally focus on tangible, visible and static product requirements, may not be fully capable of addressing all of the different types of potential risks, including the ethical and societal questions that may result from the integration of AI into goods and services. Regulating to address questions of public morals, human dignity and other fundamental rights, such as discrimination or fairness, is not only challenging but is also prone to causing regulatory fragmentation because the meaning and relative importance of such values may vary across societies.
AI also poses new conceptual challenges for the traditional, “human-centric” approach to IP rights.
The WTO can contribute significantly to developing a robust AI governance framework. WTO economists simulated various AI uptake scenarios for this report, and the differences were substantial. The economists estimate that under an optimistic scenario of universal AI adoption and high productivity growth up until 2040, global real trade growth could increase by almost 14 percentage points. In contrast, a cautious scenario, with uneven AI adoption and low productivity growth, projects trade growth of just under 7 percentage points. While high-income economies are expected to see the largest productivity gains, lower-income economies have better potential to reduce trade costs.
The report notes that AI can transform patterns of trade in services, particularly digitally delivered services, which are projected to see cumulative growth of nearly 18 percentage points in an optimistic scenario of universal AI adoption and high productivity growth.
However, it warns that the risk of a growing AI divide between economies and between large and small firms is significant, as are data governance challenges and the need to ensure that AI is trustworthy without hindering trade. There is also a need to clarify how AI relates to intellectual property (IP) rights.
The report emphasizes that a lack of coordination could cause increasing regulatory fragmentation with regard to AI. It also notes that addressing the risk of a growing AI divide is essential to leverage the opportunities offered by this technology.
The report addresses the role the WTO can play in this area as a forum for negotiation, discussion and rule-making, helping to promote the benefits of AI and limiting its risks. The report underlines that the WTO provides a multilateral framework that can help promote policy coherence and address the trade-related aspects of AI governance.
– global bihari bureau
