The World Trade Organization (WTO) issued an urgent call for reform on September 15, warning that failing to update global trade rules could lead to economic fragmentation and significant reductions in GDP and exports by 2050. The report models scenarios where global GDP drops up to 6.9% and exports decline nearly 27%, should multilateral cooperation collapse. Conversely, enhanced cooperation could boost global GDP by 2.9% and increase exports by almost 18%. WTO chief economist Rob Staiger emphasized the critical juncture of the current trading system, highlighting challenges like economic power shifts and digital trade changes.
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Story summary
The World Trade Organization (WTO) urged its 166 members on September 15 to reform global trade rules, warning that failure to do so could lead to a fragmented trading system, significantly reducing economic output and disproportionately harming poorer countries. In its annual report, the WTO highlighted that while about 72% of global merchandise trade still takes place under most-favoured-nation tariff terms, this is down from roughly 80% in 2022—a decline described as a "worrisome trend." The organization has struggled to reach consensus on reforms due to differing economic stages and conflicting interests among member countries. Following the failure of WTO members to agree on reform at a ministerial meeting in Yaounde, Cameroon, in March, talks resumed in Geneva but progress remains slow. Economists modeling potential fragmentation scenarios predict global GDP would be 5.1% lower and exports down by 18% if such fragmentation occurs.
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The WTO’s 166 members failed to reach agreement on a reform package at a ministerial meeting in Yaounde, Cameroon, in March, before relaunching talks in Geneva on issues including decision-making, dispute settlement and the challenges posed by subsidies and state intervention.
left Highlights the need for reform and cooperation among members.
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The WTO has struggled to find agreement on reforms among all members in the consensus-based organisation – as members are at different stages of economic development and with often conflicting interests.
left Emphasizes the importance of addressing diverse member interests for reform.
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Least-developed countries would stand to gain the most from stronger cooperation, but could also suffer the largest losses from fragmentation.
left Highlights the potential benefits and risks for less developed nations in a fragmented trade system.
Leaning score -0.35 for article 10029 (high confidence, 3 verified quotes) · logged 2026-09-15
WTO says global trade system at critical juncture, urges reform
AI generated
GENEVA –
asserted
WTO → say → reform
The World Trade Organization (WTO) on Sept 15 urged its members to reform global trade rules or risk a slide into fragmentation that could significantly reduce economic output and hit poorer countries hardest.
uncertain
that → urge → countries
In its annual report, the Geneva-based global trade body said existing rules have struggled to keep pace with shifts in economic power, the rise of industrial policy, digital trade and escalating political tensions between major powers.
asserted
rules → base → powers
The warning comes after the WTO’s 166 members failed to reach agreement on a reform package at a ministerial meeting in Yaounde, Cameroon, in March, before relaunching talks in Geneva on issues including decision-making, dispute settlement and the challenges posed by subsidies and state intervention.
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members → come → subsidies
The WTO has struggled to find agreement on reforms among all members in the consensus-based organisation – as members are at different stages of economic development and with often conflicting interests.
asserted
members → struggle → interests
WTO economists modelled a scenario in which the world fragments into competing geopolitical blocs and found global GDP would be 5.1 per cent lower and exports 18.6 per cent lower by 2050 than otherwise.
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exports → model → 2050
In a more severe scenario, in which multilateral cooperation collapses and is replaced by a patchwork of free trade agreements, global GDP would fall 6.9 per cent and exports nearly 27 per cent.
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GDP → collapse → agreements
By contrast, enhanced multilateral cooperation could raise global GDP by 2.9 per cent and boost exports by almost 18 per cent, according to the report.
uncertain
cooperation → enhance → report
Least-developed countries would stand to gain the most from stronger cooperation, but could also suffer the largest losses from fragmentation.
uncertain
countries → develop → fragmentation
Trade at a crossroads
WTO chief economist Rob Staiger told Reuters the trading system was at a “critical juncture”, citing four major challenges identified in the report: a broader distribution of economic power, growing state intervention in economies, changes in the nature of trade driven by digitalisation and global value chains, and rising political friction.
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system → tell → digitalisation
“The rules are under strain and they really are having an impact.
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they → have → impact
And if things fell apart at the global multilateral level, our scenarios are saying these would be the costs, and those costs would be quite large,” Staiger said.
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Staiger → fall → level
The findings come as countries increasingly pursue regional and sector-specific trade arrangements amid rising trade tensions and sweeping US tariffs.
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countries → come → tensions
In March, a group of WTO members agreed to move ahead with the organisation’s first baseline digital trade rules through a plurilateral agreement, bypassing opposition from some members.
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group → agree → members
Staiger said regional trade agreements and plurilateral initiatives could strengthen the multilateral system, but warned they could also undermine it if they evolved into competing blocs.
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they → say → blocs
Without a strong WTO framework, such arrangements risk diverting trade towards preferred partners rather than the most efficient producers and encouraging blocs to raise barriers against outsiders, Staiger said.
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Staiger → risk → outsiders
WTO rules help limit discrimination against non-members and constrain how free trade agreements are structured, he added.
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he → help → members
The WTO said trade policy uncertainty had reached unprecedented levels in recent years as governments increasingly deploy tariffs, subsidies, export controls and industrial policies.
Although about 72 per cent of global merchandise trade still takes place under WTO most-favoured-nation tariff terms, down from roughly 80 per cent in 2022, Staiger called the decline a “worrisome trend” that underscored the risk of a gradual erosion of the multilateral trading system.
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that → say → system
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