Initiative Aims At Using New Technologies To Reinvigorate International Trade

As protectionism tempts some, the International Chamber of Commerce Brazil is launching an initiative to bring new technologies to the rescue of international trade. The new digital age holds promise and is inevitable, but requires solid policymaking and improvement in such areas as education and broadband coverage to deliver on its possibilities, panellists at the World Trade Organization Public Forum said today.

The International Chamber of Commerce (ICC) Brazil organised the session today at the annual WTO Public Forum, which is taking place from 26-28 September. The panel was on its new initiative: the Intelligent Tech & Trade Initiative (ITTI) The ITTI is looking at how new technologies such as blockchain and artificial intelligence can serve international trade.

The initiative is supported by IBM.

Daniel Feffer, president of ICC Brazil, presenting ITTI, said while distrust and protectionism are tempting many, the world has a wealth of new technologies and solutions. The initiative aims at providing a bridge from protectionism to solutions using new technologies.

The initiative, he said, is addressing short-term, mid-term and long-term aspect of trade, and covers topics such as the operational function of trade, trade negotiations, and even the concept of trade.

There is a need to prepare for a change that we know is coming, he said, and the ITTI includes several drivers such as the redesign of the letter of credit, improving access of small and medium-sized enterprises to markets, supporting country delegates for WTO negotiations, and launching a reflection on how to cooperate using artificial intelligence, bridging country competences.

According to John Danilovich, ICC secretary general, the face of global commerce has and is undertaking changes at a “remarkable pace,” with the emergence of big data, and ecommerce platforms for example. The ITTI project is pitched as an opportunity to depoliticise trade discussions, and to help achieve the United Nations Sustainable Development Goals for 2030. However, there is a need for global trade reforms, he said.

Blockchain and AI Applications

Stewart Jeacocke, custom, immigration and border management expert at IBM Business Consulting, said transaction costs for companies are often bigger than production costs. Blockchain promises to provide global interactive transactions, he said.

Blockchain can allow companies to access a trusted distributed ledger with each organisation having its own copy of the records, and it allows cross-organisation processes, he said.

The first application on top of the blockchain technology was Bitcoin, created in 2009 by a mysterious character, he said. Bitcoin allowed the anonymous exchange of money over the internet without intermediaries.

Jeacocke cited several applications of blockchain, such as in the retail and distribution business to increase confidence in the global food system, and in logistics to create a global digital platform for the exchange of digital information, saving a lot of administrative steps.

Artificial intelligence (AI), or cognitive computing, is a key technology which will change economies over the next ten years, he said, adding that AI does three things: understand, reason, and learn.

AI is used to interpret tariff schedule of countries to help importers classify their goods for example, or it can be used to look at images and analysing them to detect threats and contraband in luggage, he said.

Policy Response to Address Reluctance

Rufus Yerxa, president of the United States-based National Foreign Trade Council (and former WTO deputy director general), underlined the general reluctance towards new technologies and the fears about what unregulated use of those technologies might lead to. Although not all fears are rational, he argued, fears have forced policymakers to regulate.

He underlined the importance of fostering an open, reliable, and secure digital economy, building and maintaining a policy framework which would facilitate the movement of digital information and physical goods. Access to internet should be encouraged, he said, as well as access to financial services. He also remarked on the need to maintain an effective intellectual property framework for the digital age.

Yerxa also stressed the need for a highly-skilled work force, and for setting up responsible policy to encourage the development of a digital economy.

Àlvaro Cedeño Molinari, Ambassador and Permanent Representative of Costa Rica to the WTO, said a group of countries including Costa Rica started an initiative a year ago to raise the importance of ecommerce for development. Those countries realised how little they actually knew about ecommerce, he said.

Ecommerce is trade 2.0, he said, the next level of trade.

Digital Inclusion, Skill Building Needed

Jacques Marcovitch, professor of strategy and international affairs at the University of São Paulo, Brazil, responding to the panellists, remarked about the necessity of digital inclusion. In Latin America, he said, most of the broadband is found only on the coastal areas.

He also remarked on the critical skills that will need to be developed, which he said are a major challenge and inhibitor. Continued education should be put in place to develop critical skills for generations from the 20^th century, he said.

 

Image Credits: Catherine Saez