International Trade and Trade Rules in the AI Era

In this seminar, Trefler shared his insights on the implications of AI in international trade. Comparing the rise of Wall Street and Silicon Valley, Treflter noted that the two groups shared lots of similarities as they both have influenced society through economic dominance and political influence.

Trefler identified three major challenges to the economy and the society posed by the rapid development of AI:

• Regulatory Challenges: The "hacker ethos" of Silicon Valley, which prioritizes free speech above other rights, poses significant challenges to regulations. Policymakers need to balance regulations with fostering innovation and maintaining competitive advantages over tech companies in other countries.
• Echo Chambers and Misinformation: AI has facilitated the rise of extreme politicians who can now communicate directly with voters. This has led to the rapid spread of inaccurate or fraudulent information, undermining media authority and damaging public trust.
• Addiction to Outrage: AI and social media algorithms have created an addiction to outrage. Trefler suggests that tech companies monetize their platforms by amplifying differences and provoking extreme emotions, which has contributed to societal polarization in the US and other countries.

Trefler also highlighted AI's potential to benefit international trade. AI can significantly boost digital service trade by allowing for better-targeted advertising. However, trust issues arise because AI-driven products are complex, and newer market entrants, such as China, may take longer to gain market trust.