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The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia

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  • Joshua P. Meltzer

Abstract

Foundational artificial intelligence (AI) is a general purpose technology that will affect economic activity across industries, with potentially significant impacts on jobs and international trade. This could include automation of routine and nonroutine white‐collar jobs, which reduces international trade where these jobs are on‐shored. However, where AI compliments existing jobs and leads to higher productivity, this could open up new opportunities for international trade in services. How foundational AI affects international trade will also depend on how it is regulated. Governments are moving to regulate AI, which could become a barrier to international trade. Geopolitics could also undermine opportunities for AI to deepen globalization and trade in AI as the USA and China restrict trade in the technology needed to build and run foundational AI systems. Regulating the impact of AI on international trade is an increasing focus in free trade agreements (FTAs) and digital economy agreements (DEAs). The World Trade Organization (WTO) Joint Statement Initiative (JSI) e‐commerce negotiations could also support trade in AI. Yet, there is much more that trade policy could do to minimize barriers to trade in AI.

Suggested Citation

  • Joshua P. Meltzer, 2024. "The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 129-147, January.
    • Handle: RePEc:bla:asiapr:v:19:y:2024:i:1:p:129-147
    DOI: 10.1111/aepr.12451
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    Cited by:

    1. Chengfu Fan & Shoujiu Xiong & Fei Zhou, 2025. "Analysis of multipath effects in global trade networks based on multimodal, high dimensional, heterogeneous transformer architecture: Deconstruction of nonlinear cascade and dynamic chain reaction," PLOS ONE, Public Library of Science, vol. 20(8), pages 1-27, August.
    2. Keun Lee, 2024. "Comment on “The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 150-151, January.
    3. Kenneth Flamm, 2024. "Comment on “The Impact of Foundational AI on International Trade, Services and Supply Chains in Asia”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 148-149, January.
    4. Boone, Tonya & Fahimnia, Behnam & Ganeshan, Ram & Herold, David M. & Sanders, Nada R., 2025. "Generative AI: Opportunities, challenges, and research directions for supply chain resilience," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 199(C).
    5. Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Shujiro Urata, 2024. "Deglobalization: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 1-17, January.
    6. Wang, Weilong & Wang, Jianlong & Ye, Huiying & Wu, Haitao, 2024. "Polluted air, smarter factories? China's robot imports shed light on a potential link," Energy Economics, Elsevier, vol. 134(C).

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