WTO warns of heavy losses as global trade rules fracture

• The World Trade Organisation warned that mid-sized nations face heavy losses if global trade rules collapse.
• A full system failure could reduce world gross domestic product by nearly 7% and exports by 27% by 2050.
• Countries are abandoning non-discriminatory trade rules as bilateral deals and protective tariffs reach 15-year highs.

The World Trade Organisation has warned that medium-sized open economies such as Australia risk major economic damage if the global rules-based trading system dissolves.

This warning follows a decline in merchandise trade under most favoured nation rules from 80% to 72% over two years.

“If reform is successful, we see advances in world GDP and benefits for countries,” said World Trade Organisation Chief Economist Robert Staiger.

The global body noted trade restrictions now cover 11% of international imports alongside a 12.5% US tariff on Australian goods.

Australia continues to navigate these market headwinds amid ongoing institutional strain on international dispute mechanisms.

The organisation stated that replacing multilateral frameworks with fragmented regional trade agreements threatens long-term GDP growth.

Australia has consistently joined international reform talks to protect open market access and stabilise universal trade protocols.