Global Trade Disruption: WTO Terms on the Decline

The share of global trade done on WTO terms has decreased to 72%, a significant drop amid the largest disruption to the international trading system in 80 years. Initiated by U.S. tariffs under President Trump, the decrease from 80% prompts concerns about future trade stability, warns WTO Director-General Ngozi Okonjo-Iweala.

The World Trade Organization (WTO) has revealed that the portion of global trade conducted under its terms has decreased from 80% to 72%. This decline highlights the most significant disruption to the international trading system in eight decades.

The drop largely attributes to the higher import tariffs imposed by President Donald Trump on the United States' trading partners. WTO Director-General, Ngozi Okonjo-Iweala, described the situation as unsettling but noted that with most trade still conducted on 'most favoured nation' terms, there remains a reason for optimism.

Looking ahead, Okonjo-Iweala cautions that the impact of these tariffs may continue until at least 2026. As the pace of global commerce slows, with stockpiled goods eventually depleting, the WTO adjusted its growth forecast for global trade from 0.2% to 0.9% in August.

(With inputs from agencies.)