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The Transformative Role of Artificial Intelligence in International Trade

Artificial Intelligence (AI) has become deeply ingrained in international trade, revolutionising how businesses and governments approach cross-border transactions. In this article, we will delve into how AI is transforming international trade, while also addressing the recent concerns raised in Latin America and the Caribbean regarding employment levels and digital literacy.

By Jose Miguel Estigarribia Villasanti, Economist. 2.04.2024.

Image by Juan Agustín Correa Torrealba.

The fear of how new generative AI tools will impact Latin American and Caribbean countries is reasonable, especially when considering the existing concerns in the region regarding employment and digital literacy. The unemployment rate in Latin America is relatively high, with an average of seven percent for the region (ILO, 2022). Moreover, the OECD has determined that over 25% of jobs in Latin America may be at risk of automation, one of the highest rates in the world (OECD, 2020). In this context, the growing use of this technology raises several concerns among the population.

The concern over the rise of generative AI is so significant that El Tiempo, one of Colombia's leading newspapers, recently created a special edition allowing people to self-assess the risk of their jobs being replaced in the near future (Contreras, 2023). People are increasingly engaging with such news and may come to believe that their governments are not adequately prepared to address these challenges. It is understandable to feel that not enough has been done to prepare the population in a region where only fourteen percent of the poorest children in Latin America have internet access solely in school (OECD, 2020).

Generative AI is a new concept for much of Latin America's population, which presents further challenges in terms of education and training. If we were to define this technology, we could say that generative AI is a type of artificial intelligence that can generate content such as text, videos, and images in real-time, creating content that is difficult to distinguish from that produced by a human. It is understandable, therefore, that people are concerned that generative AI might engage in behaviours considered typical of humans and, consequently, replace them.

However, any government or societal response should be proportionate to the real risks specific to Latin America and the Caribbean. Actions that respond disproportionately to exaggeration and fear surrounding technology should be avoided. Inflexible measures, such as the total prohibition of innovation, will limit the region's ability to influence the design of new AI tools and modulate their deployment on a regional scale. On the other hand, doing nothing will exacerbate existing problems, risking the weakening of these countries' technological competitiveness and wasting valuable time in addressing the changes facing Latin America.

For this reason, we propose six specific measures that can help governments and decision-makers in Latin America develop a clear roadmap for navigating this complex and challenging context:

  1. Continue with Existing National AI Policies and Strategies: Governments should continue to implement existing national AI policies and strategies while increasing public participation. All countries have the opportunity to share information and enhance public involvement in the implementation of their national AI policies, regardless of which phase of the process they are in. Inclusive practices will not only educate the public about generative AI but also demonstrate government action in addressing these challenges.

  1. Identify and Share the Benefits of Generative AI for the Public Good: Governments should work to achieve a more balanced dialogue by carefully evaluating the benefits versus risks and impartially highlighting the benefits of generative AI for the public. Generative AI offers governments a real opportunity to improve public services through their government and digital transformation programs, for example, by reducing response times and increasing access to information.

  1. Define Socially Tolerable Use of Technology: As a society, we must define how these tools will be used and how to manage issues such as plagiarism and misinformation (e.g., deepfakes). Ethical debates must be a priority, and different models should be tested to determine how to ensure basic principles. Governments should also promote ethical principles in the private sector, encouraging companies and AI entrepreneurs to design and implement ethical tools.

  1. Accelerate Regulatory Experimentation and Develop Draft AI Legislation: Before enacting extensive regulations, Latin American countries can experiment with various regulatory approaches around generative AI to see how they would function in the region. Regulatory sandboxes and policy prototypes will help countries assess the impact of these proposals. A comprehensive project to prototype policies would allow experimentation with innovative regulatory proposals that have not yet been officially adopted by governments.

  1. Enhance AI Literacy Among the Population, Especially Women and Children: Governments should prioritise educational initiatives not only to support employment but also to reduce people's fears and promote responsible AI use. Educational programs should prioritise the training of both women and children, as they are particularly affected by AI in the long run.

  1. Establish Strategic Alliances; Collaborate Instead of Compete: Governments in the region should not work in isolation. Collaboration and information sharing can help all Latin American citizens benefit from the development of shared capacities and infrastructures. Governments can work with external entities such as academic institutions and international organisations that already contribute to Latin America. This collaboration can lead to a synergistic effect on understanding and harnessing the potential of this technology.

In conclusion, while the rise of generative AI presents challenges and uncertainties, it also offers opportunities for Latin American and Caribbean countries to participate actively in shaping the future of AI. By taking a balanced and proactive approach, governments can ensure that AI benefits the public while addressing the risks effectively.

At IVEJM, we understand the importance of AI, and we, along with our partners, are preparing to provide even more support to businesses and individuals to ensure they are well-prepared for the future, where AI is an aid and not an obstacle. For more information, please contact an IVEJM representative.

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