AI may boost global trade value by nearly 40 per cent: WTO

Nigeria's Ngozi Okonjo-Iweala, Director-General of the World Trade Organisation, WTO, speaks to the media about the WTO revised trade forecast during a press conference, at the headquarters of the World Trade Organization in Geneva, Switzerland, Oct. 5, 2022. (Martial Trezzini/Keystone via AP)

Artificial intelligence could boost the value of global trade by almost 40 per cent by 2040 thanks to cost reductions and productivity gains, the World Trade Organization said Wednesday.

In its latest annual World Trade Report, the WTO identified AI as one of the few bright spots as the global trading system has been upended by the United States slapping high tariffs on its trading partners.

“AI holds major promise to boost trade by lowering trade costs and reshaping the production of goods and services,” WTO chief Ngozi Okonjo-Iweala said while presenting the report.

She said WTO simulations suggest AI could increase exports of goods and services by nearly 40 per cent above current trends.

However, much like the technology threatens to disrupt labour markets, a lack of proper policies could see lower income countries miss out on the opportunities.

“One important question is whether AI will lift opportunities for all, or whether it will deepen existing inequalities and exclusion,” Okonjo-Iweala said.

If lower-income economies fail to bridge the digital divide, WTO economists calculate they would see only an eight per cent gain in incomes by 2040, far below the 14 per cent gain in higher-income economies.

However, if they narrow the digital infrastructure gap by 50 per cent and adopt AI more widely they could match the gains in higher-income countries.

“With the right mix of trade, investment and complementary policies, AI can create new growth opportunities in all economies,” Okonjo-Iweala said.

At the same time, the WTO found that countries are applying more restrictions on the trade of AI-related goods.

Nearly 500 restrictions were in place last year, mostly by higher- and medium-income economies. That compares to 130 restrictions in 2012.