World Trade Organization warns of critical juncture for global trade system

The World Trade Organization (WTO) has released its 2026 World Trade Report, describing the multilateral trading system as being at a “critical juncture.” The report warns that the erosion of WTO rules could carry high costs, while deeper cooperation could yield significant economic benefits. Director-General Ngozi Okonjo-Iweala noted that approximately 72% of global merchandise trade still operates under WTO most-favored-nation rules.

The report outlines three potential trajectories for the global trade system by 2050: an enhanced multilateral system, a geopolitically fragmented world, and a world dominated by bilateral and regional free trade agreements. An enhanced multilateral scenario is projected to increase global GDP by 2.9% and global exports by 17.9% by 2050. Conversely, fragmentation or a shift toward regional agreements could lead to significant economic losses, with global GDP potentially decreasing by 5.1% or 6.9%, respectively.

A major concern highlighted in the report is the unequal distribution of trade gains. While the WTO has helped reduce income gaps between developed and developing economies, many regions remain marginalized. Specifically, the report notes that Africa’s share of global trade remains below 3%, and Least Developed Countries (LDCs) account for less than 1% of global trade. The WTO advocates for systemic reforms alongside complementary national policies to ensure more inclusive growth.