Artificial Intelligence is Trade Policy’s New Frontier



Susan Ariel Aaronson | Centre for International Governance Innovation

People are increasingly reliant on artificial intelligence (AI) — that is, the machines, systems or applications that are capable of performing tasks that, until recently, could only be performed by a human. Think of your morning routine: maybe a Google Assistant checks your calendar and reminds you of your meetings. Then you survey Twitter, which uses algorithms to curate what you see — the latest about Trump, trade and technology rise to the top. From there, your smartwatch coaches you through your workout, telling you about both your progress and potential. And at the end of it all, when you settle in for some Netflix, your profile suggests a few thrillers you’re likely to binge-watch.

Marketing statistics reveal that some 57 percent of consumers expect voice-activated smart assistants to have a major or moderate impact on their daily lives by 2020. By then, 85 percent of customer interactions will be managed without a human. Just as we depend on AI, many applications and devices powered by AI depend on cross-border data flows to fuel and train them. Every day, an incredible amount of data flows through the internet, over borders, and between individuals, firms and governments to power everything from Siri to a Google search. Because all of this movement is directly or indirectly associated with a commercial transaction, such data flows are essentially traded. 

To date, data flows related to AI have been governed by World Trade Organization rules drafted before the invention of the internet. Because language was originally drafted to govern software and telecommunications services, it is implicit and out of date. Today, trade policymakers in Europe and North America are working to link AI to trade with explicit language in bilateral and regional trade agreements. They hope this union will yield three outputs: the free flow of information across borders, large markets to help train AI systems, and the ability to limit cross-border data flows in order to protect citizens from potential harm. As of December 2017, only one trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — the CPTPP, formerly the TPP — includes explicit and binding language to govern the cross-border data flows that fuel AI. Specifically, the CPTPP (which is still being negotiated) includes provisions that make the free flow of data a default, requires that nations establish rules to protect the privacy of individuals and firms providing data (a privacy floor), bans data localization (requirements that data be produced or stored in local servers), and bans all parties from requiring firms to disclose source code. These rules reflect a shared view among the 11 parties: nations should not be allowed to demand proprietary information when facilitating cross-border data flows.

The European Union has also introduced limits on the use of algorithms as a human right in the regulations underpinning the digital single market. Article 21 allows anyone the right to opt out of ads tailored by algorithm. And article 22 allows citizens to contest legal or similarly significant decisions made by algorithms and to appeal for human intervention

Clearly, the European Union’s approach does not reflect North American norms when it comes to regulation. But NAFTA renegotiations — assuming they aren’t halted by United States President Donald Trump —provide an opportunity to begin a discussion in North America on how to encourage the data flows that power AI while simultaneously protecting citizens from misuse or unethical use of algorithms. Canada should lead the way, given its commitment to human rights and its comparative advantage in machine learning.

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