Global Trade on WTO Terms Falls to 72%, Amid Disruption to International Trading System

Strategic Insights -

As the largest disruption to global trade rules in 80 years continues, the Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, has warned that the share of trade conducted under the WTO's "most favored nation" (MFN) terms may fall further. Since US President Donald Trump started imposing higher import tariffs, the share of global trade conducted on MFN terms has dropped from about 80% to 72%, according to WTO data. This has raised concerns about the predictability and stability of the global trading system, with Okonjo-Iweala emphasizing the importance of celebrating the continued majority of trade taking place on MFN terms.

Key Takeaways:

  • The share of global trade conducted on WTO terms has fallen to 72%, a decline from 80% since the US imposed higher import tariffs.
  • The disruption to global trade rules is the largest in 80 years, according to WTO Director-General Ngozi Okonjo-Iweala.
  • Despite the recent surge in global commerce, the WTO has raised its global trade growth forecast from 0.2% to 0.9% in August.
  • Okonjo-Iweala warned that the effects of tariffs may be felt later in 2026 as the frontloaded goods are exhausted.
  • The WTO's Director-General emphasized the importance of celebrating the majority of trade taking place on MFN terms, currently at 72%.
  • The US imposed higher import tariffs on most of its trading partners, leading to a decline in WTO terms trade.
  • The global trading system is experiencing unprecedented disruption, with the WTO's Director-General warning of its implications.

Statistics:

  • The share of global trade conducted on WTO terms has fallen to 72%.
  • The share of global trade conducted on MFN terms dropped from 80% in the past year.
  • The global trade growth forecast was raised from 0.2% to 0.9% in August by the WTO.
  • The surge in global commerce in the first half of the year contributed to the increased trade growth forecast.
  • 80 years: the duration of the largest disruption to global trade rules, according to the WTO.
  • 2026: the potential year when the effects of tariffs may be felt.

Sources:

  • Reuters
  • WTO data
  • Saudi Research and Publishing Co.