Harmonizing innovation and regulation: The EU Artificial Intelligence Act in the international trade context

Abstract

The European Union's Artificial Intelligence Act focuses on establishing harmonized rules across EU Member States so that AI systems are safe, transparent, and respectful of existing laws and fundamental rights. It introduces a risk-based regulatory approach, classifying AI applications by risk levels and imposing stringent compliance requirements on high-risk applications. The paper critically examines the Act's provisions, including its prohibitions on certain AI practices, requirements for high-risk AI systems, and mandates for transparency and human oversight. The paper examines the implications of the Act for international trade and technological regulation, particularly in the context of the World Trade Organization's Technical Barriers to Trade (TBT) Agreement. It addresses the Act's potential impact on developing countries, highlighting concerns that the Act's uniform standards could potentially exacerbate the digital divide and create barriers in global AI innovation and trade. The paper suggests incorporating flexibility and differential standards in the Act, enhancing technical assistance for developing countries, and advocating the EU's active participation in global standard-setting.