The United Nations’ AI tool gives countries advice for negotiating trade deals. It suggests who to negotiate with, advocates which tariffs to lower, and lays out the benefits of each reduced tariff.
This could be a game-changer for nations which lack the resources or experience with negotiations. “In many developed countries you have huge teams of people working on that with very rich experience”, but less developed nations may not know where to start, says Mia Mikic.
Mikic is the outgoing Director of Trade, Investment and Innovation Division at the United Nations Economic And Social Commission For Asia And The Pacific (UNESCAP). She shares how the organisation is making trade more inclusive.
More inclusive trade negotiations
Trade negotiations aren’t always held on a level playing field. UNESCAP developed an AI platform to help policymakers understand their options. Users pick a country to negotiate with on the website, which then analyses possible agreements between the two countries.
The site shares which countries they’re already trading with, along with other existing agreements and statistics. The AI even suggests what to negotiate, such as which products the country should aim to remove tariffs on.
This tool, known as the Trade Intelligence and Negotiation Advisor or TINA, could be an “equaliser” in global trade, Mikic says. Bangladesh is currently using it to negotiate a free trade agreement with India, she shares.
Mikic is currently Advisor at Large of the Asia-Pacific Research and Training Network on Trade (ARTNeT). The network aims to develop the region’s trade, by training researchers and helping leaders translate data into better policies.
The UN has also set up a treaty for cross-border paperless trade, which will make trade more inclusive. E-documents are cheaper, Mikic explains. “It would be easier for the small and medium sized enterprises, as well as women, to engage in that process.”
The UN will continue supporting micro, small and medium-sized enterprises. It recently released a series of guidelines on how ASEAN governments can create policies to support them better.
Fundamentally, governments need to know which businesses qualify for help, and what kinds of support are most helpful. The UN is working with countries including Cambodia, Malaysia and the Philippines in these areas, Mikic shares.
It will also need to establish an accreditation network, so companies know where to go to be recognised as an inclusive business, she adds. This will be necessary to qualify for government aid.
Human-centered trade and tech
As nations focus on the big picture of trade deals and economic progress, leaders cannot overlook the impact on individual lives, Mikic believes.
“We often forget that trade is just an instrument to improve the living standards of people. It is not there to accumulate the quantity of exports or do something else,” she says. Trade deals should ultimately give people more and cheaper options for products and services, so they can improve their quality of life.
“Equally, you have to think about adverse effects in that context as well,” she adds. Leaders may have to consider how to retrain or even relocate workers in sectors that have been disrupted.
Governments also need to be sensitive when creating tech policies, especially in emerging areas like AI. Some segments of the population may be fearful of new tech because they don’t understand them, Mikic notes. It’s up to governments to explain these tech well, so citizens know what they’re used for.
A new order for world trade
The health and economic crises in 2020 led some nations to redraw trade lines. Some countries have applied tariffs in a “very nonchalant” way, and Mikic is wary about the long term impacts of these.
“These sorts of instruments are very sticky. Once you put them in, it’s very difficult to remove them, so then they accumulate,” she says.
Besides, distributing supply chains may in fact help to stabilise them. There is “solid evidence” that most disruptions in medical goods or other essential products were not due to the fact that they were produced internationally. “On the contrary, the fact that supply was from overseas pulled many countries out of the deep end,” she notes.
The global trade market will also need to contend with the issue of government subsidies. Governments have poured out large amounts of money to cushion the economic impact of the pandemic. This is no issue when it’s done “horizontally” to help individuals tide through the crisis, Mikic says.
But it becomes complicated when large corporations use state subsidies to boost their position in the global market. This could lead to unfair competition: firms from richer states can afford to keep growing, while businesses that don’t receive any help from the government lose their place in the market.
Right now, multilateral trade rules on subsidies are not very clear and “definitely need further work”, Mikic points out. But the World Trade Organisation can help countries reach an agreement on what’s acceptable, she says.
As the pandemic threatens to fragment our world further, governments need to take care to make trade more inclusive and fair. Tech, open talk and a human-centered approach to policy can help.