The World Trade Organisation’s future effectiveness will depend on its ability to respond to a more integrated, multipolar and diverse global economy without abandoning the rules and principles that underpin the multilateral trading system, chief economist Robert Staiger says.
In its 2026 Global Trade Report, “A critical juncture for the world trading system”, the WTO argues for repairing what is broken, updating what is outdated, preserving what works and adapting international cooperation to new realities.
The report’s central argument is that many of the WTO’s challenges are, in some respects, a consequence of the system’s own successes. It helped create a more open, integrated and rules-based global economy but also one in which trade disputes are more complex, WTO membership more diverse and economic power more widely distributed.
Despite the disruptions to the multilateral trading system, Staiger said about 72% of global merchandise trade took place under the WTO’s core most-favoured-nation (MFN) where tariffs offered to one nation must be applied to all.
That underscored the resilience of the system even as countries increasingly used national security arguments to justify bilateral trade measures.
Low- and middle-income economies accounted for about 23% of global trade in 1995. By 2024, their share had risen to 45%.
“This is one of the clearest signs of the trading system’s success in making the global economy more open and inclusive,” Staiger said.
Digitally delivered services had also grown more than fivefold since 2005 and accounted for about 55% of global services exports, reflecting the changing nature of international trade.
The WTO report uses model simulations to compare alternative futures for international trade cooperation.
The difference between a future of strengthened multilateral cooperation and one in which the multilateral trading system continues to erode could be as much as 10% of baseline global real GDP. If, as many members believe, the status quo is unsustainable, the estimate illustrates the potential cost of failing to reform the system.
According to simulations by WTO economists published in the report, global GDP would fall by 5.1% and global exports by 18.6% in a “geo-fragmented world” scenario, in which the multilateral trading system splits into geopolitically aligned blocs.
In an “FTA world” scenario, in which multilateral cooperation is replaced by a network of free trade agreements and the WTO no longer operates, global GDP would fall by 6.9% and global exports by 26.9%.
Four challenges to cooperation
The report identifies four developments that have made cooperation among WTO members more difficult.
The first is the changing distribution of economic power.
The rise in low- and middle-income economies’ share of global trade, from 23% in 1995 to 45% in 2024, was, in many respects, a success story, Staiger said.
Integration into world trade has supported growth, development and income convergence while making the global economy less concentrated.
“The challenge, but also the opportunity here, is to achieve new bargains that reflect current economic realities without losing the development dimension of the system,” Staiger said.
The second challenge is the growing diversity in the degree and form of government involvement in markets.
Greater state intervention has raised what the report calls “interface” problems and concerns about maintaining a level playing field.
“The WTO does not require every member to adopt the same economic model. The question is how different models can coexist within common rules without subsidies, state trading or other interventions undermining negotiated market-access commitments,” Staiger said.
The third challenge is the changing nature of trade.
Global value chains, digitalisation, artificial intelligence and environmental policies are altering what is traded, how it is traded and how policy decisions spill across borders.
The changes make cooperation within the WTO more complex and necessary.
The WTO estimated in its 2025 World Trade Report that artificial intelligence could add 13.2% to global GDP over the next 15 years.
At the same time, new technologies and digital trade are creating cross-border policy challenges.
“One of the report’s central tensions is that cooperation is becoming more complex at precisely the moment when deeper integration makes cooperation more necessary,” Staiger said.
The fourth challenge is rising geopolitical tension, which has altered perceptions of the balance between the benefits and risks of economic interdependence.
Concerns about supply-chain concentration, technological rivalry and national and economic security have prompted governments to reduce import dependence, limit technology flows and restrict investment.
“The report does not assume geopolitical rivalry can be removed from trade policy. It argues that rivalry does not eliminate the economic case for cooperation. Predictable rules may matter especially to smaller economies, which are particularly vulnerable to power-based bilateral bargaining,” Staiger said.
The report points towards adapting how the WTO’s core principles are applied rather than abandoning the principles.
Possible areas for reform include multilateral negotiations, plurilateral agreements, stronger transparency and monitoring, more effective committee work and functioning mechanisms for resolving disputes.
Staiger said it was not an argument for preserving the multilateral trading system unchanged. Nor did it argue that the founding logic of the system had become obsolete.
Instead, Staiger said, the central message of the “World Trade Report 2026” was that the global trading system was at a critical juncture not because cooperation has ceased to matter but because cooperation must work under more demanding conditions.
The argument, ultimately, was for adaptation, he said.