The Intersection of AI and International Trade – Trends and Developments

By Sarah Nada

2023 has been a whirlwind year for artificial intelligence (AI), marked by a flurry of activity and some fascinating trends. From generative AI to constitutional AI, the tech continues to evolve by the day—making way for a dynamic era of unprecedented opportunities and challenges.

The recent surge in AI adoption across industries is reshaping the way the world works. As AI technologies continue to advance, businesses worldwide are increasingly leveraging automation, data analytics, and machine learning to increase efficiency. Naturally, this means that the economic landscape is also expected to undergo profound changes.

Where AI and International Trade Intersect

The foreseeable future is likely to entail various intersections between Artificial intelligence and international trade.

Perhaps the most obvious is the potential of AI to spur innovation, by enabling businesses to develop novel products, services, and processes which in turn can enhance their competitiveness in the global market.

The integration of AI technology would also help in reducing trade costs significantly technologies can streamline supply chains, optimise logistics, and automate processes in a multitude of sectors. This would help facilitate efficient cross border transactions and smoother international trade flows.

The building of AI systems requires inputs that often need to be obtained through cross-border trade. These inputs include goods, services, people, and most importantly, data. Data flows across borders are crucial for the development of AI models. The training of AI to produce useful insights requires processing massive volumes of data from across the globe and relies on other cross-border activities that are subject to trade rules including cloud computing services. Trade law will have a critical role to play in the exchange of this data across borders.

Beyond its need for digital services, AI development also requires a significant amount of hardware, such as the most advanced semiconductors, which have been the source of recent trade policy measures.

International trade and AI will also intersect in enabling the deployment of AI solutions across borders. In the future, businesses can potentially leverage AI tech in improving their global operations, improving customer service and experience and expanding their reach.  

In summary, the future is likely to see AI and international trade closely intertwined—shaping each other’s development. In this context, policymakers will need to adapt trade policies to foster the development of the economy while balancing other interests.

The Role of International Trade Law

This could involve creating regulations that encourage data sharing and collaboration, which are crucial for AI development. Policymakers may also need to consider how to handle intellectual property rights in a way that balances the need for innovation with the protection of authors’ rights. Additionally, they will need to address ethical considerations, such as privacy and bias, to ensure that the benefits of AI are realised without compromising individual rights.

The lack of a sufficient regulatory framework for AI is a cause for concern as a number of issues like misinformation, bias, surveillance and weaponisation of AI have emerged along with it.

The broader regulatory framework for AI is still in its formative stages, as evidenced by the Voluntary AI Commitments recently introduced in the US and EU’s emerging AI Act and the recently unveiled Artificial Intelligence Office. Balancing the need for transparency and risk control in an industry that is already global will pose difficulties for regulatory bodies.

The process of international collaboration is only in its initial stages and will require the involvement and contributions of the tech companies driving the AI revolution.

The Lack of Universality in the Approach to AI

Matters of morality, intellectual property, and privacy are part and parcel of the AI phenomenon and are dealt with differently across cultures and jurisdictions. A suitable example is the starkly different approaches taken regarding AI in copyright ownership in China and the US.

Even among markets such as the European Union and the United States, approaches to privacy and free speech have been radically different. Additionally, diverse national interests in terms of trade liberalisation further complicate the landscape. Wealthier nations, predominantly influential in the AI market, aim to maximise trade liberalisation. In economically challenged countries where tariffs play a crucial role in government budgets, the considerations are markedly different.

This lack of universality regarding normative approaches to AI regulation also makes a multilateral solution difficult to attain.

A Multilateral Solution

While there are a number of challenges to overcome in reaching a multilateral solution, including the heightening tension between nations, in the interest of international trade, it is arguably preferable to a patchwork of regional trade agreements. Forging agreements at the WTO will prevent international fragmentation.

As an alternative to legislation, the WTO can play a role in this landscape with soft law, informal rules and norms as a way for states to experiment AI regulation in line with their objectives.

In Conclusion

At a point in time where policy is lagging way behind the fast-evolving AI technologies, international coordination is needed to create uniform policies that would facilitate international trade in the AI reality. In the face of the growing digital divide, there is a critical need for trade policy to evolve and ensure equitable growth across the world and contribute to a more sustainable, inclusive global economy.

The views and opinions expressed in articles submitted to the Comparative Advantage Blog are those of the author and do not necessarily reflect the views of The Moot Court Bench.