Global trading enduring ‘most sustained’ disruption: WTO

The World Trade Organization said in its annual report that the global trading system is facing its most prolonged disruption in living memory. Business Recorder reported on Tuesday that the WTO warned that challenges to trading rules could erode living standards across a geo-fragmented world. The WTO's report says a shift toward unilateral policies could cost the world economy about five percent of GDP and push exports down 18.6 percent by 2050.

Speaking to diplomats on Tuesday, Okonjo-Iweala put the cost of geopolitical fragmentation at about five percent of global GDP. She said a world where the WTO disappeared and was replaced by a network of free trade agreements would see losses nearer seven percent. In her view, if members reinforce multilateral cooperation, global GDP could rise by roughly three percent.

The WTO, which will publish an update to its forecasts on October 8, says 72 percent of world trade still falls under its rules, down from 80 percent two years earlier. Robert Staiger, the agency's chief economist, told AFP that the trend is worrying. Staiger noted that 11 percent of global imports are now hit by fresh duties and trade curbs, the highest level in over 15 years. He said the AI boom may be hiding part of the fall in world trade, though AI trade is concentrated among few nations.