WTO Issues Fragmentation Warning as Trade Blocs Form
The WTO has formally warned that accelerating trade fragmentation into regional blocs could reduce global GDP by up to 5% over the next decade.
The WTO formally warned that accelerating fragmentation of global trade into competing regional blocs could reduce global GDP by up to 5% over the next decade. Director-General Okonjo-Iweala cited the explicitly geopolitical nature of recent trade policy decisions as a concerning departure from rules-based trade principles. The report identified technology decoupling, full economic blocs, and selective cooperation as three fragmentation scenarios. For trading companies, those able to operate compliantly across multiple regulatory environments are positioned to capture premium margins that single-bloc operators cannot access.
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