AI may boost global trade by 40pc in 15 years

Adoption of Artificial Intelligence (Al) could help reducing trade costs, boost productivity and expand participation in global markets at a time of increasingly complex trading environment.

The net result will be a boost in the value of cross-border flows of goods and services by nearly 40 per cent in one and a half decades or by 2040 as AI-driven reductions in trade costs and productivity gains will translate into increases in global trade coupled with real income.

The development and deployment of AI are also projected to generate a substantial increase global GDP, ranging from 12 to 13 per cent across scenarios.

The World Trade Report 2025 made these projections and observations. The flagship publication by the World Trade Organization (WTO) Secretariat is formally released in Geneva on Wednesday morning at a session of the WTO Public Forum 2025. The theme of the latest World Trade Report is: ‘Making trade and AI work together to the benefit of all.’

Based on the projected growth rate, FE estimation showed that global trade in goods and services may reach at US$46.20 trillion in 2040 from $33.30 trillion in 2024. Global services trade, in terms of exports, reached $8.90 trillion in the last year, recording a robust 10 per cent growth over the previous year. The global exports of goods, however, stood at $24.40 trillion in 2024.

Before formally launching the report, a closed-door press briefing took place where WTO’s deputy Director-General Johanna Hill and report coordinators Marc Bacchetta, Emmanuelle Ganne and Ankai Xu talked to journalists. They also explained the key features and highlights of the report.

Speaking at the briefing, Hill said uncertainty in trade policy weighs heavily on business confidence, investment and supply chains. Uncertainty remains one of the most disruptive forces in the global trading environment.

"These are certainly testing times for the multilateral trading system. But the fact that many WTO Members continue to respond to trade measures in line with the WTO rulebook is definitely a silver lining," she added.

Now, while the trade landscape is changing fast and geopolitics, or geoeconomics, dominate the headlines, we are facing other trends that are reshaping the future of the global economy and international trade. AI is certainly one of them," Hill added.

According to the report, AI could lead to significant increases in trade and GDP by 2040, with global trade projected to rise by 34 per cent to 37 per cent across different scenarios based on ‘different degrees of policy and technological catch-up between low-, middle- and high-income economies. ’

 “Trade, in turn, can be a powerful enabler of inclusive AI-supported growth by helping economies access AI-enabling goods, such as raw materials, semiconductors and intermediate inputs,” it adds. The WTO report also estimates that global trade in these goods totalled US$2.3 trillion in 2023.

However, the report notes that for AI and trade to contribute to inclusive growth policies need to be in place to bridge the digital divide, invest in workforce skills, and maintain an open and predictable trading environment.

"AI has vast potential to lower trade costs and boost productivity. However, access to AI technologies and the capacity to participate in digital trade remain highly uneven," WTO Director-General Ngozi Okonjo-Iweala says in her foreword to the report.

"With the right mix of trade, investment and complementary policies, AI can create new growth opportunities in all economies. With the right frameworks, trade can play a central role in making AI work for all. The WTO is committed to supporting this effort," DG Okonjo-Iweala added.

In a scenario in which low- and middle-income economies narrow their digital infrastructure gap with high-income economies by 50 per cent and adopt AI more widely, these economies are projected to see incomes rising by 15 per cent and 14 per cent, respectively.

The report also added that AI’s impact on inclusive growth will also depend on the design of trade and trade-related policies.

As trade-related AI challenges are rooted in broader policy issues, complementary policies in areas such as infrastructure, energy, education and government support, it suggested closer cooperation between the WTO and other international organisations to support broader global participation in the AI-driven economy.

The report discusses how domestic policies and international cooperation can shape the trade and AI relationship to favour inclusive economic growth.

WTO agreements, such as the ITA, the GATS, the TBT Agreement and the TRIPS agreement, already support the development and deployment of AI.

However, further WTO commitments on goods and services, such as broader participation in the ITA and updated GATS commitments, could make AI not only more inclusive but also more affordable.

Investing in education and training and deploying appropriate labour market policies can help avoid a widening of inequality within economies, the report adds.

The report also emphasises the role of the WTO in helping to deliver inclusive access to AI and its benefits. The multilateral trade rule-making body provides a forum for WTO members to discuss AI-related trade measures. In this connection, the report says that 80 specific trade concerns raised at the WTO have focused on AI.

“Additional commitments from members, such as through broader participation in the WTO's Information Technology Agreement and updated commitments under the General Agreement on Trade in Services, could make AI more inclusive and affordable,” the report adds.

This year’s trade report is the 23rd edition of the WTO’s one of the key annual flagship publications. The World Trade Report was first published in 2003, focusing on development.

munni_fe@yahoo.com

[The FE correspondent is in Geneva at the invitation of the Secretariat of the World Trade Organization (WTO) and Friedrich-Ebert-Stiftung (FES)]