Data flows, artificial intelligence and international trade: impacts and prospects for the value chains of the future
In-depth briefing and analysis on the issues of digital trade and the geopolitics of trade provided to the European Parliament.
This study was prepared for the European Parliament’s Committee on International Trade (INTA). The study is available on the European Parliament’s online database, ‘ThinkTank‘. Copyright remains with the European Parliament at all times.
On November 26 2020, the European Parliament published a paper requested by the European Parliament’s Committee on International Trade (INTA), in which Bruegel scholars Georgios Petropoulos (Senior fellow), Niclas Poitiers (Research fellow) and André Sapir (Senior fellow) provided both an in-depth briefing and analysis on the issues of digital trade and the geopolitics of trade. This follows a discussion and testimony given November 9 2020 before MEPs at the webinar entitled ‘Data flows, artificial intelligence and international trade: impacts and prospects for the value chains of the future’.
Socio-economic effects of digital trade and artificial intelligence on EU industries
Artificial intelligence and new digital technologies are transforming digital trade. They facilitate the development of new business models of trade and reduce the geographical barriers of economic transactions. Such transformations are quite useful for the small and medium enterprises. Artificial intelligence is being adopted by both digital and non-digital sectors, but its adoption varies a great deal across countries, including within the EU. Data and information flow play a crucial role in digital trade by allowing personalization.
Digital trade is not new, but it is taking new forms that are ushering a new phase of globalisation. So far digital trade mainly affected trade in goods, including through global value chains, though some service activities have already become more tradeable thanks to digital technologies. The new phase of globalisation driven by artificial intelligence and new digital technologies is likely to do for services what the previous phase did for manufacturing: to vastly increase trade between advanced and emerging economies. This prospect raises important issues for domestic policies and trade policy.
Geopolitical Aspects of Digital Trade