WTO Warns Of 'Most Serious And Sustained' Trade Disruptions
The WTO says poorer economies would bear the biggest losses, with fragmented trade cutting exports 18.6% and global GDP 5.1% by 2050.
- On Tuesday, the World Trade Organization warned that trade fragmentation could slash global GDP by 5.1% by 2050, urging members to reform rules amid a "worrisome trend" of eroding multilateral cooperation.
- WTO Chief Economist Rob Staiger described the trading system as at a "critical juncture," citing four major challenges: broader economic power distribution, growing state intervention, digitalization changes, and rising political friction.
- Trade fragmentation could hit poor economies nearly four times harder than rich ones, with least-developed countries facing a projected 10.6% real GDP decline by 2050 under a geo-fragmented scenario.
- In a more severe scenario where multilateral cooperation collapses and is replaced by a patchwork of free trade agreements, global GDP would fall 6.9% and exports nearly 27% by 2050.
- Conversely, enhanced multilateral cooperation could raise global GDP by 2.9% and boost exports by 18%, WTO Director General Ngozi Okonjo-Iweala said, emphasizing cooperation's founding logic remains relevant today.
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In its annual report, the World Trade Organization warns that "returning to a unilateral trade policy would have great costs" and could reduce global GDP by around 5% and exports by 18.6% by 2050. "World trade policies and the WTO experience the most serious and sustained disruptions since the creation of the multilateral trading system 80 years ago," the report notes, echoing a warning issued in March by its Director General, Ngozi Okonjo-Iweal…
WTO experts have developed a perception that the world is expected to break down into rival blocs, noting that by 2050 the global gross domestic product (GDP) will be 5.1% lower.
World trade is not well-ordered, warns the WTO Chief Economist against WORLD. He fears huge loss of prosperity through ever new regional agreements.
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