Alicia Nicholls
On September 15, the World Trade Organisation (WTO) released its eagerly awaited annual World Trade Report 2026 on the opening day of its Public Forum, held in Geneva from September 15–17, 2026. The report argues that the nearly 80-year-old rules-based multilateral trading system, underpinned first by the General Agreement on Tariffs and Trade (GATT) and subsequently by the WTO since 1995, has reached a pivotal moment.
The report credits the system with supporting an almost fifty-fold expansion in global trade, lowering trade barriers and providing greater predictability for businesses engaging in international trade. However, the environment in which those rules operate has been changing. Rising geopolitical tensions and the current US administration’s use of country-specific tariffs under various statutory authorities have intensified pressure on the system and challenged its commitment to non-discrimination.
According to the report, around 72% of global merchandise trade still takes place on WTO most favoured nation (MFN) terms. This compares with an estimated 83% in 2022, identified in a WTO staff working paper published in 2025. These figures point to the continued importance of MFN treatment, but also to the pressures it faces given current developments.
MFN is a cornerstone of the WTO’s non-discrimination principle. It generally requires WTO members to extend any trade advantage granted to one trading partner to all other WTO members, subject to permitted exceptions, including qualifying free trade agreements and preferential treatment for developing countries.
The WTO’s modelling illustrates what is at stake. Strengthening multilateral cooperation could raise global GDP by 2.9% by 2050 relative to the baseline. By contrast, scenarios in which the system gives way to geopolitical blocs or a fragmented network of free trade agreements could leave global GDP 5.1% or 6.9% below that baseline. The gap between stronger cooperation and the more damaging erosion scenario is therefore roughly 10% of global GDP. These are alternative scenarios, but their message shows that allowing the system to erode could carry substantial costs for global welfare, particularly for smaller economies. Preserving its benefits requires meaningful reform.
For small states like ours here in the Caribbean, these findings matter. We generally do not possess the market size or economic leverage to negotiate with major powers on equal terms. Common rules, non-discrimination, transparency and predictable market access commitments provide protections that bilateral bargaining, which is often affected by power asymmetries, alone cannot easily replicate. In a more fragmented system, Caribbean exporters could face greater uncertainty over tariffs and other conditions of market access. The report itself highlights the particular vulnerability of smaller and poorer economies to discriminatory deals and unilateral measures.
At the same time, the current system is not perfect. There are many important ways in which it has served us, but also ways in which it has fallen short. WTO reform has long been mooted, and remains a central issue following the Fourteenth Ministerial Conference (MC14). Most Caribbean countries, with the exception of The Bahamas, are WTO members. For Caribbean policymakers, the growing prominence of “might is right” reinforces the importance of continued active engagement in the WTO, including pressing for reforms that respond to our development needs.
The rules negotiated and reforms agreed today will help determine the conditions under which our small economies participate in global trade for years to come. Our aim must remain to ensure that this participation redounds to the benefit of our economies, our societies and our people.
The full report may be accessed here.
Alicia Nicholls, B.Sc., M.Sc., LL.B. is an international trade specialist and the founder of the Caribbean Trade Law & Development Blog: www.caribbeantradelaw.com.
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