By Karen Lynch
“Very instrumental tools, such as bringing the letter of credit to a 21st Century blockchain-intensive marketplace, or modeling negotiation scenarios through AI, will enhance both transactions and trade agreements,” ITTI Founder Daniel Feffer said in announcing the initiative.1
The intersection of technology and trade was at the top of the agenda at the WTO Public Forum. And in the market, intelligent trade projects and businesses are already proliferating. In September 2017, for example, a dozen banks from around the world announced they are developing an open account trade finance network using a distributed ledger platform.2 In the fourth quarter of 2017, a Chinese technology company planned to launch a supply chain platform that uses AI and blockchain to reduce the cost and manual processes of global trading, including international payments.3
The ITTI's founders aim to break down roadblocks to further AI and blockchain advances in international trade, conducting research and acting as a common forum for representatives from technology, international business, government, and academia. “It is only by fostering the interaction among these key stakeholders that tech-intensive solutions will be crafted and developed,” said Feffer, who is also president of ICC-Brazil.4
Feffer and ITTI Director Marcos Troyjo outlined a range of practical implications of AI and blockchain for international trade: “Instrumentally, they enable more proactive supply chains by predicting customer behavior, calculating fast and cheap shipping routes, and foreseeing customer cancellations. Ultimately, an artificially intelligent supply chain is a proactive supply chain, one that is both agile and able to alleviate the impact of inevitable disruptions.”
The advanced technologies can also facilitate international trade compliance, help draft smarter contracts, and improve access to trade financing, the ITTI's founders said.5 AI and blockchain could be particularly useful to small and mid-sized enterprises (SMEs) and less developed countries (LDCs), both of which have lacked access to trade networks and formal credit structures, they said.
Separately, in a recent ICC survey of bankers, 44 percent said they were prioritizing digitalization including the use of fast-emerging platforms. “It's clear corporates are investing considerable time and energy in shortening, simplifying, and reinforcing their physical and financial supply chains,” said Mark Evans, Managing Director, Transaction Banking at the Australia and New Zealand Banking Group. Trade bankers must work with these customers on appropriate solutions, he said.
For governments negotiating international trade deals, the ITTI's founders spoke about how delegations could collect and structure information to explore different negotiating scenarios, while interacting via cloud-based networks. Weighing the pros and cons of trade agreements in this way could also help countries make better trade policy decisions, they said.
In this overall context, the ITTI has set an ambitious goal. “By bringing technology and trade closer together, we will not only be lifting the flows of exports and imports, but improving the very essence of international cooperation,” its founders said.6
The Intelligent Tech & Trade Initiative was recently launched as a public-private forum for advancing international trade through artificial intelligence and blockchain technologies. The move comes amid a proliferation of related platforms and businesses. The ITTI will provide research and a common forum for discussing the application of these technologies not only in trade transactions but also in the negotiation of international trade agreements.
Karen Lynch is a journalist who has covered global business, technology and policy in New York, Paris and Washington, DC, for more than 30 years. Karen also is a principal at Content Marketing Partners.
1. “ICC Brasil Launches Intelligent Tech & Trade Initiative at WTO Public Forum,” International Chamber of Commerce; http://www.prnewswire.com/news-releases/icc-brasil-launches-intelligent-tech--trade-initiative-at-wto-public-forum-300524306.html
2. “R3 and 12 Banks Plan Overhaul of Open-account Trade Finance,” Finextra; https://www.finextra.com/newsarticle/31113/r3-and-12-banks-plan-overhaul-of-open-account-trade-finance
3. “Seven Stars Cloud Readies AI, Blockchain-Powered Supply Chain Platform,” Pymnts.com; https://www.pymnts.com/news/b2b-payments/2017/seven-stars-cloud-ai-blockchain-supply-chain-platform/ and “Company Profile,” Bloomberg; https://www.bloomberg.com/profiles/companies/SSC:US-seven-stars-cloud-group-inc
4. “Why Build an Intelligent Tech and Trade Initiative?” International Tech & Trade Initiative; http://itti-global.org/estudos/why-build-an-intelligent-tech-and-trade-initiative/
5. “We Should Make AI and Blockchain Boost Global Trade,” HuffPost; http://www.huffingtonpost.com/entry/we-should-make-ai-and-blockchain-boost-global-trade_us_59cf7646e4b0f58902e5cc65
6. “Why Build an Intelligent Tech and Trade Initiative?” International Tech & Trade Initiative; http://itti-global.org/estudos/why-build-an-intelligent-tech-and-trade-initiative/