WTO models a 6.9% GDP loss under severe trade fragmentation

On September 15, Reuters reported that the WTO’s annual report urged reform after its 166 members failed to agree a package in March, warning that severe fragmentation could leave global GDP 6.9% and exports nearly 27% below the counterfactual by 2050. The WTO identified industrial policy, digitalisation, state intervention, shifting economic power and political friction as pressures that existing rules have not kept pace with. The figures are scenarios rather than forecasts, but they illustrate why regional arrangements increasingly coexist with an impaired multilateral dispute system. Law firms should design trade and investment structures for overlapping tariffs, subsidies and regional rules instead of assuming WTO disciplines will supply a timely common remedy.