The World Trade Organisation (WTO) has warned that the global trading system is experiencing its most serious and sustained disruption in 80 years, urging countries to strengthen multilateral trade cooperation to prevent deeper economic fragmentation.
The warning was contained in the WTO’s 2026 annual report released on Tuesday, which said the global trading system had reached a critical juncture amid growing geopolitical tensions, unilateral trade policies and increasing restrictions on international commerce.
The organisation warned that a shift away from multilateral trade rules towards unilateral policies and competing geopolitical blocs could have significant consequences for the global economy.
According to the report, a fragmented global economy could reduce global Gross Domestic Product by about 5.1 per cent and global exports by 18.6 per cent by 2050.
The WTO further estimated that if the organisation disappeared and was replaced by a network of free trade agreements, global GDP could fall by about 6.9 per cent, while global exports could decline by 26.9 per cent.
WTO Director-General Ngozi Okonjo-Iweala said the current challenges were occurring on a scale not seen since the multilateral institutions were established to support open and predictable global trade following the Great Depression and World War II.
She said trade cooperation had helped narrow income gaps between developing and advanced economies while contributing to peace among member countries.
Although the global trading environment had changed significantly, Okonjo-Iweala maintained that the principle that economies benefit more from cooperation than unilateral action remained relevant.
She urged WTO members to strengthen multilateral cooperation, preserve what works and reform areas of the system that require change.
The WTO said geopolitical fragmentation would particularly expose smaller and poorer economies to greater risks because they have fewer resources to absorb disruptions in international trade.
Okonjo-Iweala said enhanced multilateral trade cooperation could instead increase global GDP by about 2.9 per cent and global exports by 17.9 per cent.
The report also highlighted the growing use of tariffs and other trade restrictions. WTO Chief Economist Robert Staiger said new tariffs and restrictions now cover about 11 per cent of global imports, the highest level in more than 15 years.
He noted that 72 per cent of global trade still operates under WTO rules, down from 80 per cent two years ago, describing the trend as disturbing.
Staiger also said the resilience of global trade could partly reflect the rapid expansion of artificial intelligence, as AI-related goods require substantial international trade in servers, computers, data-centre equipment and other inputs.
However, he cautioned that AI-related trade remains concentrated among a relatively small number of countries and should not be taken as evidence that the broader trading system is free from pressure.
The WTO said the way forward was not to abandon the multilateral trading system but to adapt its rules and practices to the changing global economy.
It stressed that the future of international trade would depend on countries’ ability to repair weaknesses in the system, update outdated rules, preserve effective mechanisms and strengthen cooperation.
