Post by : Anis Farhan

The Promise and Peril of AI in Global Trade

Artificial intelligence is poised to revolutionize global commerce. The World Trade Organization's 2025 report projects that AI could increase global trade by up to 40% and boost global GDP by 12–13% by 2040. Key drivers of this growth include reduced trade costs and enhanced productivity through innovations in logistics, compliance, and communication. AI-powered translation tools, in particular, could allow small producers to compete more effectively in global markets, with potential export growth of up to 11% in low-income countries—conditional on improved digital infrastructure.

However, these benefits are not guaranteed. The WTO warns that without inclusive policies and investments, AI could deepen existing divisions and the upwards of 37% growth in global trade may not be reached by 2040.

Unequal Access: The Digital Divide

A significant concern highlighted by the WTO is the uneven distribution of AI resources. High-income countries currently dominate the AI landscape, controlling over 80% of the AI chip market. In contrast, low-income economies face barriers such as high tariffs on AI-enabling goods, reaching up to 45% in some cases. This disparity limits their ability to harness AI's potential, thereby widening the economic gap between nations.

The WTO emphasizes the need for open and predictable trade policies to facilitate equitable access to AI technologies. Without such measures, the digital divide is likely to persist, hindering the growth prospects of developing nations.

The Workforce Challenge: Job Displacement and Skill Gaps

AI's impact on the labor market is another area of concern. While AI can enhance productivity, it also poses the risk of job displacement, particularly in sectors reliant on routine tasks. The WTO's report indicates that labor market disruptions could compound the risks of a widening divide. AI has the potential to affect the labor market significantly, particularly in low- and middle-income economies where workers may lack the skills to adapt to new technologies.

To mitigate these risks, the WTO advocates for investments in education and training, as well as the deployment of appropriate labor market policies. These measures can help workers transition into new roles and industries, ensuring that the benefits of AI are broadly shared.

Policy Recommendations: Bridging the Gap

To ensure that AI contributes to inclusive growth, the WTO recommends several policy actions:

• Investing in Digital Infrastructure: Closing the digital divide is crucial for enabling developing countries to access and benefit from AI technologies.

• Enhancing Education and Training: Providing workers with the skills needed to thrive in an AI-driven economy is essential for reducing job displacement and fostering economic resilience.

• Implementing Inclusive Trade Policies: Developing nations should have a seat at the table regarding AI regulation and ethical frameworks, ensuring that their interests are represented in global discussions.

• Promoting International Cooperation: Collaborative efforts among countries can facilitate the sharing of knowledge, resources, and best practices, fostering a more equitable AI landscape.

Conclusion: A Call for Inclusive AI Governance

The WTO's 2025 report underscores the transformative potential of AI in global trade and economic development. However, it also highlights the risks associated with unequal access and the potential for deepening global inequalities. By adopting inclusive policies and fostering international cooperation, the global community can harness AI's benefits while ensuring that no nation is left behind.

As AI continues to shape the future of global commerce, it is imperative that all countries, regardless of their economic standing, have the opportunity to participate in and benefit from this technological revolution. The choices made today will determine whether AI serves as a tool for inclusive growth or a catalyst for widening disparities.

Disclaimer:

This article is based on publicly available information and does not represent the views of the World Trade Organization or any affiliated entities. The content is for informational purposes only and should not be construed as professional advice.