Geneva: The global trading system is facing a period of significant change as geopolitical tensions, government interventions and rapid technological developments reshape the way countries conduct international commerce.

A recent assessment by the World Trade Organization shows that the international trade system is under sustained pressure, with existing rules facing challenges from changing economic relationships and new policy priorities. The organisation says the global trading system has reached a critical juncture as economic power becomes more widely distributed among countries.

Emerging Economies Gain Greater Role

One of the most notable changes has been the growing participation of low- and middle-income economies in global trade.

Their share of global trade increased from 23 percent in 1995 to 45 percent in 2024. This transformation has changed the structure of international commerce and increased the importance of emerging markets in global supply chains and production networks.

The broader distribution of economic power has also created new challenges for international trade negotiations, as countries increasingly have different economic priorities and policy interests.

Geopolitical Tensions Affect Trade

International conflicts and geopolitical tensions have increasingly influenced economic policy.

Governments are paying greater attention to supply-chain security, strategic industries and dependence on foreign suppliers. The WTO notes that economic interdependence, once viewed largely as a source of efficiency, is increasingly being considered through the lens of national and economic security.

These developments could influence investment decisions, manufacturing locations and the movement of goods across borders.

Government Policies Reshape Markets

Governments are also playing a larger role in supporting domestic industries.

Industrial strategies and subsidies have become more prominent in trade discussions. While such measures can support domestic production and strategic sectors, they can also affect competition between companies operating in different countries.

This has increased pressure on international institutions to address how national policies affect trading partners.

Artificial Intelligence Changes International Commerce

Artificial intelligence is emerging as another major force affecting global trade.

The WTO says digital technologies have fundamentally transformed international commerce and that the rapid development of AI is accelerating this transformation.

AI could create new opportunities in digitally delivered services, productivity and cross-border business. At the same time, differences in technology access, infrastructure and regulatory systems could create new gaps between economies.

Trade System Still Supports Most Global Commerce

Despite the challenges, the existing multilateral trade framework continues to play a major role in international commerce.

Around 72 percent of global merchandise trade still takes place under most-favoured-nation tariff terms negotiated through the WTO system. The organisation also continues to provide a platform for trade negotiations and dispute resolution among its 166 members.

A More Complex Global Economy

The changing trade environment reflects a broader transformation of the global economy.

Supply chains have become more interconnected, technology has altered the nature of international commerce and emerging economies have gained a larger role in global production and trade.

At the same time, governments are balancing economic openness with concerns about national security, industrial capacity and strategic dependence.

Future of Global Trade

The WTO’s assessment suggests that the international trading system will need to adapt to these structural changes.

Digital commerce, artificial intelligence, environmental policies, subsidies and geopolitical tensions are increasingly connected to trade policy. How countries manage these issues will influence the future structure of international commerce and economic cooperation.

The global trading system therefore enters a period in which cooperation remains important, while governments simultaneously seek greater resilience and control over strategically important parts of their economies.