Failure to reform WTO could cost global economy 10% of output by 2050

The World Trade Organization (WTO) has issued a stark warning that failure to reform its multilateral trading system could result in a 10% loss of global economic output by 2050. This warning comes as geopolitical rivalries increasingly reshape the world of commerce. The WTO's World Trade 2026 report indicates that a geo-fragmented world, where trade rules are being challenged on a scale not seen since the institution's creation, could lead to a 5.1% shrinkage in global GDP and an 18.6% decline in exports.

In contrast, strengthening multilateral cooperation could boost GDP by 3%, or approximately $3 trillion, by midcentury, with least-developed countries potentially seeing a 7.7% increase in GDP, equivalent to $100 billion. High-income economies could gain about $1.7 trillion in GDP, while middle-income nations would benefit by $1.2 trillion.

The WTO director general, Ngozi Okonjo-Iweala, emphasized that the global trading system has delivered enormous benefits over the past 80 years, but the challenges today are a consequence of its own achievements. The report underlines the need for WTO members to adapt rules-based cooperation to a more integrated, multipolar, and diverse global economy while preserving the system's openness, predictability, and fairness.