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It can help to grow economies, quickly and fairly, by identifying the risks entailed in a long-chain transaction or a complex supply chain. So far, so good — but there is no system in place to monitor and pinpoint suspicious global trade patterns. Nor is there any mapping of complex international trade flows, or overall analysis of trading patterns.

Every data point, each statistical analysis and prediction model, must be spot on. Over-reliance on unverified data, or information that is inaccurate or misleading, can have dire consequences. A simple misunderstanding of context can result in AI’s notorious “technological hallucinations”. Errors can multiply through a supply chain, posing risks that can have far-reaching effects on the economy — such as covering up dumping, counterfeiting, or sanctions avoidance.

AI can play a vital role in monitoring compliance, analysing trends, and assessing the impact of policies. It provides transparency and engenders trust and accountability. AI-driven decisions and recommendations produce credible, far-reaching results. It can tell us where to seek proof of reliability, raise red flags, and shed light on previously invisible interconnections of the global economy. It assists in furthering our understanding of the complexities of trade dynamics.

But it’s crucial to see AI for what it is: a tool for augmenting human capabilities, not replacing them. Take this example. Over 200 million bills of lading, crucial papers in international trade, were recently reviewed by the International Centre for Trade Transparency (ICTTM). It found that 13.6 percent contained at least one error. The OECD decrees that 2.5 percent of global trades, and up to 5.8 percent of EU imports, are counterfeit. The documents provide particulars about country-of-origin, product codes and descriptions, quantities, and costs. Certifications, health and safety requirements, regulatory controls, anti-dumping measures, and taxation are all set by the data collected.

Again, any mistake can have dire results.

ICTTM research shows that goods produced with slave labour still appear on international markets; companies are bypassing safety standards by intentionally mislabelling products as requiring no certification. There have been exports of semiconductors pushed through in this way by dubious actors. Traceability becomes more muddied with each step of the transaction.

There’s clear evidence that some offenders re-incorporate in new jurisdictions as soon as they are caught — still selling to the same importers. This basic move, because of the lack of international oversight, makes these actions almost untraceable.

When error, fraud, and counterfeit percentages are multiplied over a complex supply chain many layers deep, the dangers become apparent. These “mistakes” have serious repercussions for society — and can even put lives at risk. There is an enormous, hidden, problem in our global supply chains and individual “empires” of technology have no way of solving it.

Nationally built systems, siloed in their own technological and political kingdoms, are not a suitable response to these problems. Countries inspect a small percentage of imports, and almost no exports. There is no system in place to monitor global trade patterns, no mapping of international trade flows.

And this is where AI can be of use. The international commerce ecosystem is complex, and bots have the capacity to spot macro- and micro-trends across the entire system, rather than just between two trading partners. The fact that we can exercise some control over our interactions with AI is significant. It can help us spot potential threats and zero-in on the primary papers that need closer inspection. It is a tool to identify and chart patterns and act as an early warning system, while keeping faith in the reliability of source materials. Once we know where to look, locating bad actors and verifying documents becomes simpler.

The boundaries of AI are still expanding. Once we are able to recognise global macro trends, we can use it to our advantage. It can shed light on our reliance on specific vendors and suppliers. It can help us to evaluate the economic risks associated with our suppliers, as well as learn how our products fit into global supply networks. With AI, a component that poses a security concern can be identified and rapidly removed from the supply chain. Without it, such problems may remain hidden.

Human and computer error, and intentional fraud in supply chains, can all be distinguished. AI’s potential lets us conduct comprehensive analyses down to the smallest bodog sportsbook review of details, leading us straight back to the original suppliers, buyers, and documents. The goal is for a zero-trust approach in which papers and records are verified and analysed.

Applying AI to international trade provides a workable answer to the growing difficulties and risks associated with internationally integrated markets. By embracing it, we are not advocating for unquestioning faith in an unknown system. We are suggesting its use as a tool to draw focus to specific areas. If we continue to adopt and use AI with a zero-trust, verify-and-confirm methodology, the transparency, accuracy, and efficiency it can bring could become essential in navigating the global commerce system.

Right now, at the intersection of science and business, artificial intelligence presents a once-in-a-generation opportunity. Used wisely, it has the potential to help overcome some entrenched problems. Its potential extends beyond the cutting of human labour or the generation of otherwise unpredictable results. It gives us a new perspective, an analytical tool that could radically alter how we think about international trade. It could help our economies to flourish in ways that are beneficial to all involved.

There’s no tolerance for AI hallucinations here. Precision, clarity, and faith in human scrutiny are front and centre. ESG reporting is becoming the new norm. Interoperability affords legal protection and a process that safeguards SMEs and banks. Collaborative efforts such as Project Perseus bring together technology, finance, and policy to unlock sustainable access for SMEs via data-sharing. This is critical for stakeholders in the business and banking worlds.

Nationally built systems in technological and political silos must be avoided to combat these challenges. Collaborative efforts between nation states would enable a comprehensive understanding of patterns and targeted strategies. Artificial intelligence should be seen as an instrument that shows us the bigger picture of a vast chain over which no single country, or corporate, should ever have total control.

So, where do governments, regulators, and the private sector go from here? Frameworks and processes are in place to deliver success — and the time for theory is over.

Lord (JD) Waverley is Member of the House of Lords of the United Kingdom and Chairman of Capital Finance International (CFI.co).

To read the full commentary, please click here.

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Technological innovation has had a profound impact on the way we live, communicate, and work. The dawn of the Fourth Industrial Revolution has opened immense opportunities but also created significant challenges. Questions about cybersecurity, disinformation, and privacy, for example, vex businesses, governments, and private citizens alike. A different set of issues are related to the sheer size, reach, and power of the companies that comprise Big Tech and how to deal with them.

Being a large corporation, and being in the vanguard of a far-reaching and ever-expanding industry, is, by itself, neither good nor bad, but it will often lead to increased scrutiny. In some instances, this might result in attempts to either block certain companies from entering a market, or, alternatively, make it more difficult for them to operate in it. In 2015, for example, President Obama alluded to this when he accused the European Union of digital protectionism in its investigations of American tech companies— “[i]n defense of Google and Facebook, sometimes the European response … is more commercially driven than anything else.” But to chalk scrutiny of large tech companies and their business practices up to mere protectionism would miss the mark. The many benefits of modern technology notwithstanding, there are powerful economic factors within digital markets that limit competition and stifle innovation, and as a result can hurt consumers.

Concerns about Big Tech are also not confined to Europe. In fact, there seems to be a growing consensus in both the United States and the European Union of the need to, at a minimum, explore ways to check certain actions and the broader influence of the largest tech companies.

To be sure, there are differences in how Big Tech is viewed in the United States and Europe. At a basic level, many Europeans are viscerally suspicious of the market and the power of big corporations. This clearly also applies to the tech sector, as evidenced by a poll conducted in the run-up to the European Parliament elections last year. Fully 64 percent of voters thought that the European Union had been too lax in its regulation of U.S. tech giants. By contrast, most Americans believe in the power of the market to self-correct and are warier of government overreach. Whether consciously or not, it is hardly a stretch to assume that these different attitudes bodog casino inform thinking about competition policy and enforcement decisions on both sides of the Atlantic.

The focus of this article is on single-firm conduct, and the transatlantic divide over how best to use antitrust and competition policy to navigate this new and exciting world. Section 2 looks at what makes Big Tech unique from an antitrust perspective. Section 3 provides an overview of U.S. and EU competition law as it relates to single-firm conduct, as well as their respective institutional structures. Section 4 assumes a more prospective posture, looking at possible future trends and what steps Big Tech can take to protect its own interests in this environment.

To read the full article please click here.

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This paper was written toward the end of 2019. Today, in 2020, the world seems a different place, as we collectively experience the coronavirus crisis and new awareness about issues of racism and policy brutality. These crises have brought about new, and highlighted existing, urgent problems ― often exacerbated by Big Tech’s iron grip on our economic and social lives.

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The WTO itself is in serious crisis. The 12th WTO Ministerial Conference was due to be held in June 2020 but has been postponed ― possibly for another year. WTO Director-General Roberto Azevêdo has said he will step down on August 31, 2020, a year before completing his term. The United States is still blocking the appointment of new Appellate Body Members to the WTO, which means the WTO’s judicial function is not operational.

At the same time, many countries have had to take measures to deal with the novel coronavirus pandemic that are inconsistent with their WTO obligations. This is leading to a rethinking of whether the WTO model ― which left many countries short on domestic productive capacity and locked in rules that put foreign corporate rights before the domestic public health emergency ― are really fit for this purpose. There is a need for countries to have greater flexibility to depart from existing trade rules. This could well lead to a fundamental rethink of the WTO and its model of extreme liberalization ― which would be an urgent and welcome outcome.

Online commerce is booming, but many technology start-ups and thousands of small businesses have been hit hard by the pandemic-related economic shutdowns. On the contrary, Facebook, Google, and Amazon have seen their market shares and profits explode during the crisis.

At the same time, there is growing concern about the control that Big Tech exerts over so many aspects of public life, especially through anticompetitive behavior. Members of the US Congress and several federal agencies have joined European Union Bodog Poker leaders in growing calls to break up vertically integrated roll-up corporations like Amazon, Google and Facebook.

A key provision of US tech policy that shields platforms from liability is coming under political scrutiny in the United States. As science deniers circulated inaccurate information about COVID-19 on social media, some tech corporations began to take steps to remove or flag erroneous content from their platforms. The Trump administration claimed a political bias, and Republicans are looking into rescinding the platforms’ immunity. At the same time, Democrats are concerned about some of the platforms’ policies of not taking down false or misleading political advertising that could jeopardize our elections.

There is growing recognition in many countries that digital corporations should pay their fair share of taxes. The EU is proposing this as a fiscal support measure in the wake of the crisis, but the Trump administration has just abandoned efforts toward a multilateral solution at the Organization for Economic Cooperation and Development (OECD).

Dependence on essential workers during the coronavirus crisis has also led to a greater understanding of the need for hazard pay and social protection, especially in sectors with sectoral bargaining agreements. But so-called “gig” workers, such as Uber drivers, GrubHub deliverers, and Instacart shoppers, still do not enjoy basic labor rights as workers, rather than as “contractors.”

In the United States, pressure campaigns have successfully targeted the use of facial recognition software powered by artificial intelligence (AI), since studies have demonstrated the racist impacts of such software: AI gives false positives for Black people more often than for whites.

At the same time, WTO members have undertaken multiple rounds of negotiations with a view to drafting a new “plurilateral” agreement on digital trade. They have negotiated draft texts in secret on 13 different provisions on data collection, liability, market access rights, nondiscrimination, source code disclosure, taxes, cybersecurity, and more, as described in this paper.

During these times of crisis, uncertainty, and rapid transformation, we need our governments to be able to respond more proactively to emerging problems. We need public interest concerns about economic rights, racial justice and fairness, and human, civil, and political rights to be the focus of conversations about rewriting the rules governing data and technology.

To accomplish this, however, we need to ensure that corporations are unable to acquire new WTO “trade” disciplines designed by Big Tech to consolidate their power over our economy and limit democratic oversight in the public interest.

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As the global leader in digital trade, the United States has a big stake in ensuring that international rules facilitating its continued expansion are put in place.

The Obama Administration’s bold agenda to establish these rules across Europe and the Asia-Pacific did not yield lasting success, with the failure of the Transatlantic Trade and Investment Partnership (TTIP) negotiations and the Trump Administration’s withdrawal from the Trans-Pacific Partnership (TPP). Nonetheless, the key elements of US digital trade policy enjoy bipartisan policy support, providing a promising basis for the next Democratic administration to re-engage with Europe, our biggest digital trading partner.

Part 1 of this issue brief explains why international rules are needed to protect and facilitate digital trade. Part 2 describes the turbulent past decade in transatlantic trade relations and the growing importance of US digital trade with Europe. Part 3 explains why the US government and the European Union (EU), during TTIP negotiations, were unable to agree on a digital trade chapter, including a key provision guaranteeing the free flow of data. Finally, Part 4 suggests how two parallel sets of trade negotiations beginning early this year — between the EU and the United Kingdom (UK) and between the United States and the UK — may help a future US Administration end the transatlantic stand-off over digital trade.

To view the full report at Progressive Policy Institute, please click here

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Economies with already strong underlying information technology are proving to be more resilient than those without this infrastructure already in place.  At a recent event, I listened to officials from Cambodia and Kenya explain how their strong digital track records are paying off during the current crisis.

In Cambodia, which had previously established an enabling regulatory environment around digital financial services, citizens were already accustomed to sending and receiving payments digitally, making it possible for the government to add tax functionality on to the pre-existing digital payment platforms. Similarly, in Kenya, citizens’ relative comfort with digital payments led to a recent uptick in the use of its e-tax system. The Kenya Revenue Authority has also been able to rely on its digital systems to obtain real-time data on emergency-related shifts in consumer spending, which helps the agency to predict the impact on revenues.

But the type of digital transformation necessary to get to this level is comparable to moving a boulder to the top of a mountain. It’s a long, arduous process, and it’s possible to lose footing along the way. Many economies, especially developing countries, rely on deeply entrenched systems and fight an uphill battle when it comes to public trust. In fact, many of the world’s lowest-income economies struggle to collect enough taxes to cover basic state functions. Add a global crisis into the mix and these tenuous relationships between taxman and citizen are likely to fall apart.

The current crisis provides an opportune moment to rework revenue strategies to be more digitally driven.  Tax administrations must shift the focus from simply processing taxpayers’ data to proactively improving compliance, policies, and efficiency. Modern revenue strategies will, to a large extent, have to run on digital platforms because they are necessary to effectively pursuing critical policy objectives such as:

• Broadening the tax base. Data-centric approaches can be used to close gaps and take advantage of missed opportunities without necessarily increasing the level of taxation. Such measures include: requiring e-commerce platforms to report sales in order to facilitate the collection of VAT and customs duties; analyzing past tax filings of citizens seeking relief under current stimulus programs to verify compliance; and supporting the collection of property taxes by matching the land registry with the taxpayer file.
• Enhancing transparency and trust. Establishing electronic platforms for tax registration, filing, payment, and dispute resolution make processes clear for citizens, provide assurances that tax payments end up in an actual government account, and reduce the risk of officials abusing their discretion. Implementation of technologies such as the MIT-incubated OPAL (Open Algorithm) provides researches, think tanks, or any citizen the ability to independently analyze tax data without having access to personally identifiable information. This will provide unprecedented transparency.
• Reducing the compliance burden. We know from a survey of 190 economies that it is getting easier for people and businesses to pay taxes. There are now 106 economies using electronic filing systems, double the number in 2004. Digital technology is reducing the time spent on paying taxes as well as the total number of individual payments taxpayers must make each year.
• Improving administrative efficiency. As governments mature in their use of information technology, they will be able to achieve substantial efficiency gains. For countries beginning their digital transformation, AI-enabled data capture of paper-based records can speed up the digitalization and reliability of the data. Others find significant value through the simplification of procedures and matching of filing information with third-party data sets. For more advanced tax administrations, the use of advanced analytics to identify underreporting will be a key value driver. In the current crisis, some administrations are also rethinking their balance between offsite and onsite audits.
• Advancing growth and other policy objectives. As the central depository of citizen data, tax administrations play an increasing role in advancing non-tax related objectives. For example, by using taxpayer data to: verify beneficiaries under cash transfer programs, monitor the consumption of goods with detrimental health impacts (e.g., alcohol and cigarettes), model tax policy responses to curb carbon emissions, identify growth drivers in the economy, detect labor market violations, and ascertain the well-being of vulnerable groups in society.

Progress toward these objectives has been uneven and the World Bank cannot get this “modernization boulder” to the top of the mountain alone. To help countries accelerate digital transformation, we need partners with multidisciplinary expertise who can help pull while we push. To that end, we co-founded the Prosperity Collaborative. This new multi-stakeholder initiative is dedicated to helping countries create better tax systems through innovative technology. Together with bodog poker review EY, New America, MIT and the Boston Global Forum, we are just getting started on a journey to bring tangible benefits to developing countries.  Our current priorities are –

• Developing global solutions to build capacity among developing countries and emerging market to undertake a successful digital transformation of their tax administrations;
• Promoting thought leadership on tax and technology;
• Exploring the creation of a mechanism to identify, prioritize, fund, and implement digital public goods for use by tax administrations;

By bringing these leading organizations together under the banner of the Prosperity Collaborative, we aim to create solutions that are well-targeted and easily replicable across different country contexts. Ultimately, we aim to create digital public goods that can be built once and deployed anywhere.

To view the original World Bank Blog post, please click here

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