WTO warns global output could fall up to 10% without stronger multilateral trade rules
Shifting economic power, rising state intervention, digitalisation, the green transition, and geopolitical tensions are making cooperation more complex: World Trade Report 2026
- ✓Shifting economic power, rising state intervention, digitalisation, the green transition, and geopolitical tensions are making cooperation more complex: World Trade Report 2026
- ✓In an “FTA world”, where multilateral cooperation is replaced by a network of free trade agreements, the declines could be 6.9 per cent and 26.9 per cent.
- ✓Over the past eight decades, lower trade barriers helped expand global trade nearly 50-fold and created a more open and integrated rules-based economy.
A World Trade Organisation report has cautioned that while a strengthened multilateral trading system could increase global GDP by roughly 3 per cent, or $3 trillion, by 2050, inaction to modernise the trading system could reduce global output by up to 10 per cent.
“A scenario of a strengthened multilateral framework could raise global GDP by 2.9 per cent and global exports by 17.9 per cent by 2050 relative to the baseline trajectory,” according to the first of three scenarios projected in the World Trade Report 2026: A Critical Juncture for the World Trading System, shared on Tuesday.
This scenario assumes a world where WTO rules are strengthened through broader market-opening commitments, new multilateral disciplines in digital trade and services, wider membership, and a calibrated framework that balances trade openness with security concerns, it added.
The other two scenarios show the cost of eroding multilateral trade rules. In a “geo-fragmented world”, where trade cooperation is organised around geopolitical blocs, global GDP and exports could decline 5.1 per cent and 18.6 per cent, respectively.
In an “FTA world”, where multilateral cooperation is replaced by a network of free trade agreements, the declines could be 6.9 per cent and 26.9 per cent. The report said the difference between stronger multilateral cooperation and erosion of WTO rules represents an opportunity cost of about 5-10 per cent of global real GDP, depending on the scenario.
It noted that the trading system’s own success had made cooperation more complex. Over the past eight decades, lower trade barriers helped expand global trade nearly 50-fold and created a more open and integrated rules-based economy.
However, shifts in economic power, greater government intervention through industrial policies, the changing nature of trade due to digitalisation and the green transition, and rising geopolitical tensions are now making cooperation more complex.
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| Issuing Authority | The Hindu BusinessLine Economy |
|---|---|
| Topic Category | BUSINESS |
| Jurisdiction | All India / National |
| Publication Date | 15 September 2026 |