WTO warns of risk of global market fragmentation without reforms

If existing global trade rules are not reformed, the world market will fragment, hitting the poorest countries the hardest. The World Trade Organization (WTO) warned about this, Reuters reported.

She noted that the existing order is barely keeping pace with changes in economic power, the rise of industrial policy, the development of digital trade and the escalation of political tensions between major powers. Within the WTO itself, it is increasingly difficult to achieve agreement on reforms, since members of this organization are at different stages of economic development and often have conflicting interests.

In this regard, WTO economists have modeled a scenario in which the world breaks up into competing geopolitical blocs. In this scenario, by 2050, global GDP will fall by 5.1 percent and exports by 18.6 percent. A more severe scenario, involving the collapse of multilateral cooperation and its replacement by a patchwork of free trade agreements, would mean a decline in global GDP of 6.9 percent and exports of almost 27 percent.