Global trade disruptions

The World Trade Organisation's latest report, published in 2026, has revealed that global trade policy and the WTO are currently undergoing their most serious and sustained disruptions since its inception 80 years ago. Three major factors have contributed to these challenges: President Trump's violation of the rule-based world economy, including the use of tariffs as a weapon; ongoing supply shortages for essential resources like electricity, gas, petroleum, and products, a result of Western sanctions on Russian fuel exports; and increased disruption after the US/Israel attack on Iran on February 28, which caused a 20-25 percent reduction in global fuel supply, further aggravated by the closure of the Strait of Hormuz and Bab-al-Mandab due to ongoing hostilities.

While the report acknowledges the WTO's valuable contributions, it emphasizes that its future effectiveness hinges on its ability to adapt to the rapidly evolving, integrated, and diverse global economy. The WTO suggests repairing broken elements, updating outdated practices, preserving what works, and adapting cooperation to new policy developments.

The organization argues that failing to do so could widen the gap in GDP between cooperative efforts and eroded multilateral trading rules by 5 to 10 percent, amounting to a potential loss of $3 trillion by 2050. Despite the challenges, the report also highlights the potential benefits of a strengthened multilateral trading system, which could increase global GDP by approximately 3 percent or $3 trillion by 2050.

The report points out that the current global economy differs fundamentally from the one faced by the architects of the General Agreement on Tariffs and Trade (GATT) and the negotiators of the Uruguay Round, due to factors such as the economic resilience of China, its control over crucial resources like rare earths refining, and the ongoing use of tariffs and sanctions by Western countries in their trade policies.