Global trade is at a critical point and needs reform. Otherwise, economic output could decline, with the poorest countries bearing the greatest impact, the World Trade Organization (WTO) said in its annual report.
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WTO Warns of a World Divided Into Trade Blocs
Existing rules are struggling to keep pace with shifts in economic power, the rise of industrial policy and digital trade. At the same time, political tensions between major powers are intensifying, the Geneva-based organization said.
The WTO warned that the world could split into geopolitical power blocs that trade mainly among themselves or only within separate free-trade zones. Under such a scenario, global economic output, measured by gross domestic product (GDP), would remain around 10% lower from 2050 onward compared with a scenario in which trade cooperation continued to expand. The least developed countries would benefit the most from stronger cooperation, but could also suffer the greatest losses from fragmentation.
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WTO Reform Faces Conflicting Interests Among Member States
“Global trade policy and the WTO are currently experiencing the most serious and persistent disruptions since the multilateral trading system was established 80 years ago,” the report said. This year’s report is titled “A Critical Moment for the Global Trading System.”
The WTO’s 166 member states failed to reach agreement on a reform package at a ministerial meeting in Cameroon’s capital Yaoundé in March. Reaching consensus on changes is difficult within an organization whose members are at very different stages of economic development and often have conflicting interests, Reuters reported.
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Source: ČTK
