Emerging technologies, such as artificial intelligence, blockchain and distributed ledger technology, paired with international policy coordination could propel global trade and accelerate economic recovery, according to a joint report by the World Economic Forum and the World Trade Organization. TradeTech – the set of technologies that enables global trade and its digitalization – is a critical part of supply chain resilience and a path to more efficient and inclusive trade.
While the benefits of TradeTech are promising, uneven development could result in unequal growth, cybersecurity risks, fragmented “digital islands” and techno-nationalism. Building international policy coordination through public-private partnerships would advance TradeTech adoption across borders. Trade agreements can play a key role in this regard. Recent trade agreements and plurilateral initiatives have started to explore the interplay between technology and trade.
The new report, The promise of TradeTech: Policy approaches to harness trade digitalization, was released today by the Forum and the WTO. The TradeTech community has identified five specific policy frontiers – the “5 Gs” of TradeTech – that drive adoption and scalability in an inclusive manner:
- Global data transmission and liability frameworks
- Global legal recognition of electronic transactions and documents
- Global digital identity of persons and objects
- Global interoperability of data models for trade documents and platforms
- Global trade rules access and computation laws
This work builds on the Trade for Tomorrow call to action in 2021, signed by 30 CEOs and chairpersons from five continents, urging world leaders to make trade work for all as part of an inclusive global recovery. One specific action was advancing an electronic commerce agreement that improves access and interoperability, enables safe and efficient digital trade and data flows, promotes openness and trust, and addresses market access issues – with the “5 Gs” contributing towards that end.
“The Forum and the WTO are glad to be working on public-private partnerships that enable the further adoption of technologies in trade, in the goal of efficiency, inclusion and environmental gains,” said Børge Brende, President, World Economic Forum, at the report launch.
Emerging technologies and digitalization are changing trade. Only 18% of trade in goods is now driven by labour cost arbitrage. Value chains are becoming increasingly knowledge-intensive, thanks in part to embedded technology. The COVID-19 pandemic has shown that digital trade and commerce are necessary for the survival of small and medium-sized enterprises, while the application of autonomous technologies – from robotics to AI – contributed to the operation of ports and warehouses with minimal staff during lockdowns. According to a World Economic Forum survey, 65% of organizations have incorporated new technologies, resulting in reconfigured value chains and increased visibility of value chain data.
Ngozi Okonjo-Iweala, Director-General, WTO, said: “Advanced technologies have the potential to make trade more efficient and more inclusive, but for this to happen policy action needs to keep pace with technological developments.”