Why the world still needs World Trade Organisation

Dawn · 27/10/2026، 8:00:47 AM

The World Trade Organisation has spent much of its recent life being told it is obsolete. In its World Trade Report 2026 launched last month, the Geneva-based body tells us what would happen if the rules are simply allowed to ‘wear away.’ It says the outcome would be quite expensive for the global economy. It models a world that breaks into rival geopolitical blocs and finds global GDP would be 5.1 per cent lower by 2050 than it would otherwise be, with exports dropping by 18.6pc. In a harsher scenario, where multilateral cooperation collapses, GDP falls 6.9pc and exports by nearly 27pc. Set against that, a reinforced system could add about 2.9pc to global output and lift exports by almost 18pc. That is roughly three trillion dollars. The report is the WTO’s flagship study and looks back over 80 years of trade rules. It is also a warning: reform the system or risk a slide into fragmentation. WTO Chief Economist Rob Staiger has told Reuters that the trading system is at a “critical juncture”. The report names four pressures: economic power is spread more widely than when the rules were written; governments intervene in their economies far more; digitalisation and global value chains have changed what trade actually is; and political friction between major powers keeps rising. Weaker WTO means riskier world for trade None of this is new to anyone who follows trade. What the report adds is a price tag, and some uncomfortable detail. About 72pc of global merchandise trade still moves on WTO most-favoured-nation (MFN) terms, meaning without special preferences for particular partners. Four years ago the figure was roughly 80pc. Staiger called the slide a “worrisome trend”, and it is the sort of change that does not announce itself. Nobody declares the end of a rules-based order. Trade simply migrates, one exemption and one bilateral deal at a time, until the exception becomes the norm. The WTO says trade policy uncertainty has reached unprecedented levels as governments