WTO warns global trade rules need reform to avoid fragmentation

September 15, 2026 at 06:18 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The World Trade Organization called on its members to reform global trade rules in its annual report released Tuesday. Without reform, the WTO warns of fragmentation that could cut global GDP by 5.1% and exports by 18.6% by 2050.

Key Facts

The WTO's annual report, released on September 15, calls for reform of global trade rules to prevent fragmentation.
If the world splits into competing geopolitical blocs, global GDP could be 5.1% lower and exports 18.6% lower by 2050.
Replacing multilateral cooperation with separate free trade agreements could reduce global GDP by 6.9% and exports by nearly 27%.
Strengthening multilateral cooperation could add 2.9% to global GDP and nearly 18% to exports, with the least developed countries benefiting most.
About 72% of world trade currently occurs under WTO most-favored-nation tariffs, down 8 percentage points from 2022.

Reform Call

The WTO urged its members to reform global trade rules in its annual report published on September 15. The organization warned that existing rules are struggling to keep pace with shifts in economic influence, digital trade growth, and rising political tensions. WTO Chief Economist Rob Steiger told Reuters the trading system is at a "critical crossroads" due to broader distribution of economic power, growing state intervention, changes in trade patterns, and heightened political friction.

Fragmentation Scenarios

WTO economists calculated that if the world splits into competing geopolitical blocs, global GDP would be 5.1% lower and exports 18.6% lower by 2050 compared to a no-fragmentation scenario. If multilateral cooperation is replaced by separate free trade agreements, global GDP could fall by 6.9% and exports by nearly 27%. Conversely, strengthening multilateral cooperation could add 2.9% to global GDP and nearly 18% to exports. The least developed countries would gain the most from enhanced cooperation and suffer the largest losses from fragmentation.

Trade Policy Pressures

The findings come as countries increasingly sign regional and sectoral trade agreements amid rising trade tensions and tariffs imposed by the administration of U.S. President Donald Trump. Steiger stressed that a robust WTO-backed framework is needed to ensure multilateral agreements direct trade toward the most efficient producers rather than preferred partners. The WTO stated that trade policy uncertainty has reached unprecedented levels in recent years. Currently, about 72% of world trade is conducted under WTO most-favored-nation tariffs, which require members to offer equal terms to all other members, down 8 percentage points from 2022.