Much of the discussion on trade recently has focused on the threat of a trade war, tit-for-tat tariffs, and the health of the global trade regime. While those issues are extremely important, they miss a more positive side of international trade – its transformation by technological innovations in the Fourth Industrial Revolution.
Trade is not only essential for development; it also creates tremendous gains for all economies by boosting productivity and reducing poverty. However, those gains are often undermined by the negative effects of trade restrictions and subsidies. Moreover, the global trading system needs to address legitimate concerns about national security and reliable access to key goods. But those must not come at the cost of developing countries, which cannot rely on domestic production and whose ability to compete at fair terms critically depends on the existence of a rules-based system that provides transparency and predictability, and prohibits trade-distorting protectionist policies.
Fortunately, the pace of technological advance can be accelerated by a commitment to investment in research and development. In fact, a substantial portion of the technology that underlies the Internet and countless commercial products-including hardware, software, encryption techniques, artificial intelligence, and the computer science behind medical advancements-is the result of federally funded research.
The emergence of new technologies that can dramatically improve the efficiency and safety of supply chains will be instrumental in expanding and diversifying trade. From smart packaging solutions that provide tracking information to shipping companies and delivery partners to trade-tech platforms that promote buy-seller discovery, such solutions will find a natural place within the international trade ecosystem if they are designed with efficiency, inclusivity and equity in mind.