Why in news?
The World Trade Organization’s World Trade Report 2025 highlighted the potential of artificial intelligence (AI) to transform global trade. The report noted that AI could raise world trade by over a third and global GDP by around one‑eighth by 2040 if the digital divide is bridged.
Key findings of the report
- AI-enabled goods trade: Trade in AI-enabling goods—such as semiconductors, specialised machinery and sensors—reached roughly US$ 2.3 trillion in 2023. These goods facilitate the adoption of AI tools across economies.
- Projected growth: By 2040, AI could boost global trade by 34–37 % and global GDP by 12–13 %. The largest gains are expected in digitally deliverable services like software, design and consulting.
- Inclusive growth challenges: Without investment in digital infrastructure, the benefits of AI may bypass developing countries. The report emphasises bridging the digital divide, harmonising standards and ensuring open markets.
Opportunities and challenges
- Opportunities: AI can reduce logistics costs through predictive routing, unlock new services trade (e‑commerce, remote healthcare), diffuse knowledge globally and support small businesses entering international markets.
- Challenges: Many developing economies lack broadband access and data centres. AI capabilities are concentrated in a few countries, raising risks of digital monopolies. Labour markets may be disrupted, and energy use for AI computing could strain sustainability.
Recommendations
- Invest in digital infrastructure: Expand broadband networks and data centres in developing countries to enable participation in AI‑driven trade.
- Skills and reskilling: Train workers to adapt to AI-driven tasks. Promote inclusive education and lifelong learning programmes.
- Open and predictable trade policies: Avoid protectionism in digital goods and services. Harmonise standards and rules on data, privacy and AI governance.
- Global cooperation: Support multilateral efforts at the WTO to update rules on e‑commerce and services. Encourage sustainable AI practices to minimise environmental impact.
Conclusion
AI could be a powerful trade multiplier, but only if countries invest in digital infrastructure, ensure inclusive access and agree on global standards. Otherwise, the benefits may remain concentrated, widening inequalities.