Summary of ITTI Panel in Genebra: “Building an Intelligent Tech &Trade Initiative – Augmented Intelligence & the Future of Global Trade”29/09/2017
“Building an Intelligent Tech &Trade Initiative – Augmented Intelligence & the Future of Global Trade”
2017 WTO Public Forum, Geneva – 27 September
Summary of Panel Discussion
Moderator: Professor Marcos Troyjo (Co-Director of BRICLab, SIPA, Columbia University)
- John Danilovich (Secretary-General of ICC)
- Ambassador Álvaro Cedeño, (Permanent Representative of Costa Rica to the WTO)
- Theresa Carpenter (Executive Director of the Center for Trade and Economic Integration, The Graduate Institute, Geneva)
- Daniel Feffer (President of ICC-Brasil)
- Jan Hoffmann (Director for Trade Facilitation of UNCTAD)
- Marion Jansen (Chief-Economist of the International Trade Center)
- Stewart Jeacocke (Leader of IBM’s Global Government Centre of Competence)
- Jacques Marcovitch (Professor, Graduate Institute in Geneva)
- Gabriel Petrus (Executive Director ICC Brazil)
- Ambassador Rufus Yerxa (President of the National Foreign Trade Council)
Daniel Feffer thanked those present; highlighting in particular, the support given by John Danilovich and the International Chamber of Commerce as well as IBM and Gearbulk. Feffer went on to explain the Intelligent Tech & Trade Initiative, stating that its aim is to pave the path from protectionist polices to cooperative solutions using new technologies. ITTI addresses short, medium, and long term aspects of trade. It also applies to operational functions of trade as well as trade negotiations. The arrival of new technologies will lead to changes for the world and businesses and we need to prepare for this. Feffer proposed five drivers to guide the initiative: redesigning the letter of credit; improving access of SMEs to markets; supporting delegates during trade negotiations using AI; addressing the challenges that countries face when trading and bridging the gap in countries’ competences; and finally, cooperating with a common compass – such as the Sustainable Development Goals and 2030 Agenda – when using these new technologies.
John Danilovich expressed his support for ITTI and affirmed the International Chamber of Commerce’s commitment to the development of world trade for the benefit of all. New developments in digital economics are unprecedented and it is necessary to respond to these new technologies. Danilovich specified two areas of interest: the opportunity to depoliticize global trade negotiations due to the deployment of AI tools which could breakdown deadlocks; and achieving the SDGs and 2030 agenda. There is also an opportunity to provide a technical trade map for SMEs through blockchain technology. Danilovich stressed that the ITTI aim is to support a more robust and inclusive global system.
Marcos Troyjo opened the panel discussion by explaining that the decision to place technology experts and trade and business leaders together was to provide an informative discussion on the realities of technologies and their effect on global trade.
Stewart Jeacocke began by giving a brief explanation of blockchain and artificial intelligence (AI) technologies to those present. The transaction costs of doing business are very high, but in the future computers will handle these transactions through blockchain networks. Blockchain allows for a trusted distributed ledger on which businesses can share processes. Each organization in a blockchain system has its own copy of every ledger and this is updated automatically. Contracts can be imbedded into a blockchain network. When a transaction is asked to occur, all organizations on the chain must agree that the contract is correct for the transaction to go through. Currently, blockchain technology is being used in many ways. Bitcoin was the first app to be created on top of blockchain technology and it allows for anonymous money transactions. Outside of finance, blockchain has been used to track diamonds; and retail groups such as Walmart and Unilever are investigating how blockchain can be used to build consumer confidence. There is also work being done to create a Global Trade Digitization platform which will bring transparency and efficiency to shipping.
Cognitive computing, or AI systems, are able to understand, listen, and learn. These systems can use data to make hypotheses and learn from experience. There are already systems in place that interpret country tariffs and can help importers using a harmonized system.
Professor Marcovitch stressed the necessity of determining which critical capabilities need to be developed for both future and previous generations in order to implement these new technologies into trade. Theresa Carpenter stressed the importance of accompanying governmental policies in light of new technologies She remarked that many of the cost reductions that come with new technologies in trade are democratizing. By reducing costs, new technologies enable a wide range of companies to access international markets. In order to support these movements, governments need to promote education about these fields. Marion Jansen mentioned that even in developed countries, children still do not have high tech educations we are still far from a generation with proactive users of technology.
Marcovitch questioned the issue of values embedded in AI technologies. Who decides which values these new technologies will learn? Jansen added to this by bringing up the issue gender disparity in computer programming. If some groups are excluded from the development of these technologies, this could have an impact on neutrality. Gabriel Petrus argued that multilateral institutions could help shape these new tools in order to ensure that neutrality will be one of the values embedded in them.
Marcovitch raised the issue of inclusion. He used the example of South America, where most of the areas that are connected to broadband are on the coast, and there is less connectivity in the center of the continent. He questioned how these new technologies could be disseminated in countries that are still being developed. Jeacocke argued that because blockchain technologies do not rely on large infrastructure capacities, they are actually well suited for developing countries. He stated that it is possible that these new technologies will leapfrog old ones in less developed nations.
Trust and Transparency
Jan Hoffman stated that these new technologies can ensure that there is increased transparency in trade transaction. Controls, inspections, and tests will all be facilitated by these technologies. Jansen agreed that blockchain does have significant potential to reduce transaction costs which would be good for SMEs. However, she highlighted the fact that while blockchain is transparent, this only applies to people who know how to use this technology. Those who are not technologically savvy will remain in the dark. She argued that it is necessary to instill trust in those who can understand and read blockchain. Marcovitch argued that it would be difficult to implement these new technologies as people would be reticent to trust them, due to a lack of understanding how they work.
Ambassador Rufus Yerxa highlighted the importance of regulatory frameworks. He argued that trade principles should be imbedded in the system in order to allow technologies to adapt. Technologically advanced countries will need to foster an open, reliable, digital economy that facilitates movement of digital information as well as services. It will be necessary to set responsible technology policies for digital economies, which is something the WTO could help foster. He argued that these new technologies will enable new players in global trading system.
Feffer mentioned that the most favored nation model could be applied to issues of technology and trade. MFN status could be connected to condition that they invest in countries so they can use international finance and cooperation to improve national technologies. This would benefit developed countries with large markets and as well as countries with smaller markets and would leave the door open to bring in partners for support and cooperation.
Government and Negotiations
Ambassdor Cedeño spoke on the concept of “smart governance”. He highlighted the fact that in past 200 years human activity has been dramatically transformed, from economics to education, to healthcare, and even entertainment. Despite this, he argued that we are still governed in roughly the same way. We now have smartphones, smart cities, business intelligence, and AI, but do not yet have “smart governance”. Cedeño argued that new technologies will also affect governance. If e-commerce is Trade 2.0, then blockchain is ecommerce 2.0. He questioned what the impact of incorporating new technologies into negotiations would be and whether or not the world would be receptive to this.
Yerxa argued that fear of these new technologies could lead to governments trying to move away from global trade. This worrying trend could slow down the deployment of these technological tools.
Cedeño argued that as we migrate to the cloud, the idea of national borders will become blurred. Imposing geographical borders onto the cloud will lead to data flow problems. Cloud computing and data flows will therefore affect the philosophical notion of sovereignty.