Increase in global trade value by almost 40 percent predicted by WTO due to AI, report suggests
The World Trade Organization (WTO) has released its latest annual World Trade Report, identifying artificial intelligence (AI) as one of the few bright spots in the global trading system. According to the report, AI could significantly boost the value of global trade by almost 40 percent by 2040.
WTO Chief Ngozi Okonjo-Iweala stated that AI holds major promise to boost trade by lowering trade costs and reshaping the production of goods and services. The report's economists calculate that lower-income economies would see a 14 percent gain in income by 2040 if they adopt AI more widely.
However, the digital divide is a significant factor in determining the potential gains from AI adoption for lower-income countries. Narrowing the digital infrastructure gap is crucial for these countries to reap the benefits of AI. If lower-income economies bridge the digital divide by 50 percent, they could match the gains in higher-income countries in AI adoption.
Okonjo-Iweala questions whether AI will lift opportunities for all or deepen existing inequalities and exclusions. She emphasises that the right policies are necessary to ensure that lower-income countries do not miss out on the opportunities presented by AI.
The global trading system has been upended by the United States slapping high tariffs on its trading partners. This has created uncertainty and instability in the global trade landscape. However, the WTO's predictions for AI suggest a potential pathway towards growth and prosperity.
The report also highlights that countries like Vietnam and other ASEAN developing nations could achieve similar gains as highly developed countries from wider AI adoption and a 50% reduction in their digital infrastructure gap. Leveraging AI as a national intellectual infrastructure, these countries could boost productivity, economic growth, and competitiveness.
The predicted boost is due to cost reductions and productivity gains. WTO simulations suggest that AI could increase exports of goods and services by nearly 40 percent above current trends. However, if lower-income economies fail to narrow the digital infrastructure gap, they would see only an eight percent gain in income by 2040.
In conclusion, the WTO's latest report underscores the potential of AI to transform the global trade landscape. With the right policies and a focus on bridging the digital divide, lower-income countries could reap significant benefits from AI adoption. However, if they do not, they risk missing out on the opportunities it presents. Okonjo-Iweala stresses that AI could create new growth opportunities in all economies with the right mix of trade, investment, and complementary policies.
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