Long run trends in international trade. The impact of new technologies

Abstract

We use the WTO Global Trade Model (GTM) to generate long-term projections on international trade and examine the potential impact of the development of digital technologies on trade. The GTM is a recursive dynamic CGE-model featuring imperfect competition, the integration of margin activities in private consumption, and baseline projections based on macroeconomic projections of the Shared Socioeconomic Pathways (SSP). We examine the potential impact of expected changes in technology, focusing on trends such as robotization, big data and artificial intelligence, additive technology (3D printing), and e-commerce. Robotization is expected to change the factor intensity of production thus affecting the pattern of international specialization (reshoring). 3D printing could have large effects for the size and pattern of international trade, leading to a shift away from trade in physical goods to digital trade. And E-commerce will reduce trade costs and raise productivity in retail sectors. We model these trends and evaluate their potential impacts.