Early Consequences Regarding the Impact of Artificial Intelligence on International Trade

Abstract

The consequences of this new technology for international trade have recently garnered much attention, thanks to the growing interest in AI's effects on the economy and society. Given the current reevaluation of the advantages of globalization by the world's leading nations, the focus continues to be on the policies governing international commerce. Understanding and forecasting future trade patterns is a high priority for decision-making within and between countries. This is because trade significantly impacts employment, production, pricing, and wages. Even though conventional economic models are intended to be accurate forecasters, we investigate the prospect that Artificial Intelligence (AI) techniques can produce more accurate predictions and associations. In addition, we describe contextual AI algorithms that can be used to analyze trade patterns disrupted by unusual occurrences such as trade wars and pandemics. The fuel for the algorithms that can forecast, recommend, and categorize policies can only be provided by open-government data; therefore, having access to these data is vital. The information gathered for this study describes the economic elements usually linked with international trade transactions. Association Rules are used for grouping commodity pairs. Finally, models and their results are presented and then appraised in terms of the quality of their predictions and associations, with example policy implications provided. This paper explores the interlinkages between AI technologies and international trade and outlines key trade policy considerations for policymakers looking to harness AI technologies' full potential. Specifically, the paper focuses on China's efforts to develop its artificial intelligence (AI) industry.