AI Projected to Boost Global Trade by 40%, WTO Warns of Economic Divides

Artificial intelligence could increase the value of global trade in goods and services by nearly 40% by 2040, a new World Trade Organization report stated on Wednesday. However, without adequate policies, AI could also worsen existing economic divides.

Under various scenarios, global trade is projected to rise by 34-37% by 2040 due to lower trade costs and enhanced productivity. Global gross domestic product could also increase by 12-13%.

“AI could be a bright spot for trade in an increasingly complex trading environment,” said WTO Deputy Director General Johanna Hill. Hill noted that AI was reshaping the future of the global economy and international trade, with potential to reduce trade costs and boost productivity amidst current turbulence.

This year, global trade rules, governed by the Geneva-based organisation, have faced major disruption. This followed tariffs imposed by U.S. President Donald Trump’s administration.

The report detailed how businesses could reduce costs in logistics, regulatory compliance, and communications. “AI-driven translation technologies can make communication faster and more cost-effective, particularly benefiting small producers and retailers by enabling them to expand into global markets,” the report stated.

These advancements could help increase export growth in low-income countries by up to 11%, if they improve their digital infrastructure.

However, the report cautioned that AI could deepen existing divides without targeted investment and inclusive policies. “The effects of the development and deployment of AI are raising concerns that many workers, and even entire economies, could be left behind,” the report warned.

WTO Director General Ngozi Okonjo-Iweala stated policymakers must carefully manage the transition to AI. “AI could upend labour markets, transforming some jobs whilst displacing others,” Okonjo-Iweala said during the report’s launch in Geneva.

She added that managing these shifts demands investment in domestic policies to enhance education, skills, retraining, and social safety nets. To ensure the widespread sharing of AI benefits, predictable trade supported by WTO rules and lower tariffs on essential raw materials, including semiconductors, are crucial, the organisation added.

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• Artificial intelligence could boost global trade in goods and services by nearly 40% by 2040.

• Global gross domestic product is projected to increase by 12-13% by 2040.

• The World Trade Organization report warned that AI could exacerbate economic divides without sufficient policies and investment.

Source: REUTERS