The WTO’s 2026 World Trade Report, released Tuesday, said the multilateral trading system is facing its most serious and sustained disruption since its creation 80 years ago. It identified shifting economic power, growing government intervention, digitalization and geopolitical tensions as key pressures on rules designed for a different global economy.
WTO economists modeled three possible scenarios. In a world divided into competing geopolitical blocs, global GDP would be 5.1% lower and exports 18.6% lower by 2050 compared with the baseline.
A more severe scenario, in which multilateral cooperation is replaced by a network of bilateral and regional free trade agreements, would reduce global GDP by 6.9% and exports by 26.9%.
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By contrast, stronger multilateral cooperation could raise global GDP by 2.9% and global exports by 17.9% by 2050, according to the report. The difference between the strongest cooperation scenario and the most fragmented one amounts to roughly 10% of global GDP.
WTO Chief Economist Robert Staiger told Reuters that the trading system was at a “critical juncture.”
“The rules are under strain and they really are having an impact. And if things fell apart at the global multilateral level, our scenarios are saying these would be the costs, and those costs would be quite large,” Staiger said.
The report comes after WTO members failed to reach agreement on a reform package at their ministerial conference in Yaoundé, Cameroon, in March. Talks have since resumed in Geneva on issues including decision-making, dispute settlement, subsidies and state intervention.
The WTO now has 166 members, and reaching consensus has become more difficult as economic interests and levels of development have diverged.
About 72% of global merchandise trade still takes place under the WTO’s most-favored-nation tariff terms, down from around 80% in 2022. Staiger described the decline as a “worrisome trend.”
The report also points to the changing nature of trade. Digitally delivered services have expanded rapidly, while artificial intelligence, global supply chains and new regulations on areas such as data, privacy and cybersecurity are creating trade issues that were not central when many existing WTO rules were developed.
Regional trade agreements and smaller groups of WTO members working on specific issues could help advance cooperation, Staiger said. But he warned that such arrangements could also weaken the multilateral system if they develop into competing blocs.
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The report says poorer countries would face some of the largest losses from a breakdown in multilateral cooperation. Least-developed countries could see GDP fall by 16.5% in a scenario where the WTO is replaced by an unstructured network of free trade agreements.
WTO Director-General Ngozi Okonjo-Iweala said the global trading landscape had changed significantly but argued that the case for cooperation remained.
The report concludes that reform does not require preserving the status quo, but adapting WTO rules to a more integrated, multipolar and diverse global economy.
