Digital Technologies and global commerce

  • Digital technologies such as artificial intelligence, the Internet of Things, additive manufacturing (3D printing) and Blockchain have been made achievable by the exponential rise in computing power, bandwidth and digital information.

 

  • Digital technologies are reshaping consumer habits by shifting purchases online through the widespread use of internet-enabled devices which provide consumers with direct access to online markets.

 

  • It is estimated that, in 2016, the value of e-commerce transactions totaled US$ 27.7 trillion, of which US$ 23.9 trillion was business-to-business e-commerce transactions.

 

 

  • On the supply side, digital technologies allow for easier entry and increased product diversity, making it easier for firms to produce, promote and distribute their products at a lower cost.

 

  • The benefits of digital technologies notwithstanding, they are also giving rise to a number of concerns, including market concentration, loss of privacy and security threats, the digital divide, and the question of whether digital technologies have really increased productivity.

 

  • International trade costs declined by 15 per cent between 1996 and 2014. New technologies will help to further reduce trade costs. Our projections predict that trade could grow yearly by 1.8 to 2 percentage points more until 2030 as a result of the falling trade costs, amounting to a cumulated growth of 31 to 34 percentage points over 15 years.

 

  • The wide adoption of digital technologies changes the composition of trade in services and goods and redefines intellectual property rights in trade. Trade in information technology products has tripled in the past two decades, reaching US$ 1.6 trillion in 2016.

 

  • The importance of services in the composition of trade is expected to increase. We predict the share of services trade to grow from 21 per cent to 25 per cent by 2030.

 

  • Digitalization has led to a decline in trade of digitizable goods (e.g. CDs, books and newspapers) from 2.7 per cent of total goods trade in 2000 to 0.8 per cent in 2016. The trend is likely to continue with the advent of 3D printing technology.

 

  • Regulation of intellectual property rights, data flows, and privacy as well as the quality of digital infrastructure are likely to emerge as new sources of comparative advantage.

 

  • The decline in trade costs can be especially beneficial for MSMEs and firms from developing countries, if appropriate complementary policies are put in place, and challenges related to technology diffusion and regulation are addressed. Our estimations foresee that, in such case, developing countries’ share in global trade could grow from 46 per cent in 2015 to 57 per cent by 2030.

 

  • Digital technologies give rise to opportunities and challenges that may require the consideration of governments and the international community in areas as diverse as investment in digital infrastructure and human capital, trade policy measures and regulation.

 

  • Provisions referring explicitly to digital technologies have been included in an increasing number of regional trade agreements. The most common provisions refer to e-government, cooperation and the moratorium on customs duties on electronic transmissions.

 

  • While the WTO framework, and in particular the General Agreement on Trade in Services, is relevant for digital trade and WTO members have already taken certain steps to promote digital trade within the existing framework, members will have to consider how they want to respond to continued changes in the economy and the way we do business.

 

(World Trade Report. 2018)