Deploying AI widely can help trade move in fast lane, WTO says

Deploying artificial intelligence (AI) technology widely will help diverse economies seize many potential growth opportunities in global trade, the World Trade Organization (WTO) said in a study.

Adopting artificial intelligence evenly across regions in trade practices will lead to a cumulative 14 percentage points increase in real growth of global goods and services trade through 2040, the WTO said in the report.

However, under a cautious “tech divergence” scenario, the impacts of AI on trade growth would be halved, with a cumulative boost of only 7 percentage points by 2040, the report, titled, “How AI Shapes and is Shaped by International Trade.”

“AI has the potential to reduce trade costs, enhance productivity across sectors, and reshape traditional trade patterns. The future of trade is services; digital; and green; and that it must be inclusive. AI can accelerate trade’s journey into this future,” WTO director-general Ngozi Okonjo-Iweala said in the report.

“But the inverse is also true. AI raises significant challenges, from the growing risk of an ‘AI divide’ to questions around data governance and privacy, how to regulate AI-enabled products and associated ethical and societal risks, as well as how to protect intellectual property in an AI-driven age,” Okonjo-Iweala said.

“While we still need to find good answers to many of these questions, it is already clear that making the most of AI-related opportunities will require their benefits to be widely shared across different economies,” she added.

AI’s functions and efficiency can evolve rapidly, leading to dynamic shifts in its capabilities and autonomy, the study said.

Its inherent complexity and opacity, as well as its potential failures and biases, raise significant concerns related to matters such as how to understand the reasons
for and basis of AI decisions and recommendations, or regarding ethics and broader societal implications, it said

AI-based tools can be used in trade finance, and can improve the supply chain by providing real-time data analytics, predictive insights and automated decision-making processes, all leading to lower trade costs and level the playing field for developing economies and small businesses, it said.

It can enhance productivity, especially in services sectors that rely on manual processes, by enabling low-skilled workers to leverage best practices of more high-skilled workers more effectively, it added.

The study also pointed out that new sources of comparative advantage may emerge from factors such as educated labor, digital connectivity and favorable regulations.

“Because AI is energy-intensive, economies with abundant renewable energy may also gain comparative advantages,” the report said, adding that although AI can potentially benefit all economies, the development and control of AI technology are likely to remain concentrated in large economies and companies with advanced AI capabilities, resulting in industrial concentration.

The risk of a growing divide resulting from applications of AI is significant, as are data governance challenges and the need to ensure that AI is trustworthy and to
clarify how it relates to intellectual property (IP) rights.

Currently, the capacity to develop AI technology is concentrated in a few large economies, and this is creating a significant divide between economies that are leading research and development in AI – in particular China and the US – and the rest of the world.

This imbalance could be further exacerbated by the use of government subsidies to develop AI. The risk of industry concentration within a few large firms could also intensify the divide between firms. These features, combined with the opacity of AI algorithms and the possibility of tacit collusion among competitor firms to maintain higher prices, present challenges for competition authorities, it said.

Given the behavior and opaque nature of AI systems, as well as the potential dual-use of some AI products (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 study said.

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, it added.

The study said the WTO can contribute significantly to developing a robust AI governance framework, with the latest report being the “first attempt to explore some key implications of AI for trade and trade rules.”

“As AI continues to evolve, governments should continue to discuss the intersection of AI and trade and its possible implications for the WTO rulebook,” it added.