Economic research and trade policy analysis

There are manifold reasons economies are reviewing their data policy. These include considerations related to privacy and data protection, national security, regulatory control or audit, digital security, and also new forms of digital industrial policy (Casalini, López González and Nemoto, 2021). While there are legitimate reasons for the diversity in regulations across economies, the regulatory landscape that underpins cross-border data flows and data localisation is becoming increasingly complex.

Both the simple and complex tariff scenarios discussed above indicate that a level of human verification is still ultimately required to ensure the quality of results after the automated tariff transposition, depending on the quality of the original tariffs datasets.

The regular work of the Regional Trade Agreements (RTA) section in the Trade Policies Review Division (TPRD) of the World Trade Organization is one among several statistical work streams that regularly require tariff line HS transposition.

In future, further refinement and testing on diverse datasets is recommended to optimize these methods for broader application. For instance, other models such as OpenAI's Text Embedding model could be compared with SBERT to compare performance rates.

Modelling the economic impacts of data regulation can help support the policy debate by presenting stakeholders with information on the potential and relative opportunity costs associated with different types of data-related measures. This information can help policy makers think about different regulations that can successfully meet public policy objectives, including privacy and data protection, in a way that imposes the least possible burden on, or trade-offs in terms of, economic activity.

I am delighted to present the World Trade Organization Secretariat’s first comprehensive report on artificial intelligence (AI) and international trade. This report marks a milestone in our efforts to understand the impacts AI is having, and will continue to have, on global trade.

Rapid advances in artificial intelligence (AI) are transforming the world economy, reshaping how work is defined, how value is created, and how opportunities are distributed across societies. Given these far-reaching effects, AI is also transforming world trade.

With the launch of ChatGPT in November 2022, artificial intelligence (AI), and in particular generative AI – capable of generating high-quality text, images and other content based on the data on which it is trained – entered into public consciousness and has been experiencing rapid adoption.

The development and deployment of artificial intelligence (AI) have accelerated in the last few years, and its applications hold the potential to revolutionize human society and economic activities.

This chapter provides a detailed economic analysis of the transformative potential of AI, focusing on its impact on trade and inclusive growth.

Alongside the scramble for critical goods such as personal protective equipment (PPE), the early stages of the pandemic saw an urgent need for accurate and credible information, a necessity for governments across the world confronted with an unprecedented global threat, not only to human health but also to economic and social well-being.

Effective engagement with the multifaceted challenges of the pandemic required the WTO to undertake extensive cooperation, both with established international partners and with new partners, including the creation of new cooperative arrangements.

The June 2022 Pandemic Declaration, adopted when the pandemic remained an international health emergency, was a historic development, a unanimous statement responding to a current crisis affecting communities in all members and observers and resulting from members’ input from across the spectrum.

The paper discusses the efforts deployed in 2008 and 2009 by various players, Governments, multilateral financial institutions, regional development banks, export credit agencies, to mobilize sufficient flows of trade finance to off-set some of the “pull-back” by commercial institutions in the period of acute crisis that has characterized the financial sector in the past two years. Given that 80 to 90% of trade transactions involve some form of credit, insurance or guarantee, one can reasonably say that supply-side driven shortages of trade finance have a potential to inflict further damages to international trade. As an institution geared towards the balanced expansion of world trade, the WTO had been concerned with occurrences of market tightening throughout this period. While a number of public-institutions mobilized financial resources for trade finance in the fall of 2008, this has not been enough to bridge the gap between supply and demand of trade finance worldwide. As the market situation continued to deteriorate in the first quarter of 2009, G-20 leaders in London (April 2009) adopted a wider package for injecting additional liquidity and bringing public guarantees in support of $250 billion of trade transactions in 2009 and 2010. Ahead of the Pittsburgh Meetings, experts reported that more than the targeted amount had been mobilized. In the meantime, through the summer and the fall of 2009, the market situation seemed to have eased – although in many countries, access to trade finance by the smaller traders had become either significantly more expensive or had simply disappeared. One can expect the trade finance market to have its up and downs for some time, because lending for trade is a function of the general lending situation of commercial banks. The paper discusses longer-term initiatives aimed at improving the resilience of the trade finance market to short-term and longer-term shocks.