AI-related demand helped push world trade to record levels in 2025, even as tariffs, geopolitical conflict and institutional weaknesses increased pressure on the multilateral trading system. The WTO’s latest annual report points to a global economy being rewired around technology, resilience and strategic competition.
GENEVA — The global trading system is facing some of the most severe disruptions of the postwar era. Yet international commerce has remained more resilient than many forecasts suggested.
That tension runs through the World Trade Organization’s Annual Report 2026, which reviews activity during 2025 and the early part of 2026. WTO Director-General Ngozi Okonjo-Iweala describes a system confronting rapid technological change, geopolitical tensions and repeated crises affecting energy, food and other critical commodities.
World merchandise trade volume grew 4.6% in 2025, up from 2.7% in 2024, while commercial services trade increased 5.3%. The combined value of global goods and services trade reached a record $34.65 trillion, up 7% year over year. Around 72% of global goods trade still moved under WTO most-favoured-nation terms.
The broader picture is not one of globalization disappearing, but of it being reorganized.
AI is becoming a major engine of trade
The value of trade in AI-enabling goods increased by more than 20% in 2025 and reached 16.8% of global merchandise trade by year-end.
Those products accounted for 42% of total merchandise trade growth, despite representing only about one-sixth of merchandise trade. Office and telecommunications equipment grew 19% as demand rose for computing equipment and digital infrastructure.
The same shift is visible in services. Commercial services trade reached $9.56 trillion, with demand for computing capacity, data processing and software helping drive growth.
For governments, AI policy is increasingly becoming trade and industrial policy. The WTO estimates that, with supportive policies, AI could increase the value of cross-border flows of goods and services by nearly 40% by 2040, while warning that unequal access to infrastructure and skills could widen existing divides.
Trade is being rerouted
Asia accounted for an estimated 71% of global merchandise trade volume growth in 2025, driven in large part by expanding Chinese exports across multiple markets.
At the same time, the value of China’s shipments to the United States fell by roughly 20%, underscoring how trade flows are being redirected amid tariffs and strategic competition.
The Middle East recorded the strongest export-volume growth at 12.9%, followed by Africa at 10.3% and Asia at 9.5%.
Global value chains still account for about 46% of world trade, only slightly below their 48% peak in 2022, reinforcing the WTO’s view that globalization is being rewired rather than dismantled.
The rules are under pressure
At the WTO’s 14th Ministerial Conference in Yaoundé, Cameroon, governments made progress on fisheries subsidies, small economies and special treatment for developing countries, but failed to reach consensus on broader World Trade Organization reform and e-commerce.
One of the most significant unresolved challenges remains dispute settlement.
The WTO’s Appellate Body remains nonfunctional, with all seven positions vacant in 2025. By year-end, 34 disputes had appeals pending.
Yet governments continue to use the system. WTO members initiated 13 new disputes in 2025, while five panel reports were circulated.
The contrast is increasingly stark: countries still rely heavily on World Trade Organization rules while struggling to agree on how to modernize the institution behind them.
Digital trade moves forward
At MC14, 67 World Trade Organization members representing around 70% of global trade adopted a pathway to bring the Agreement on Electronic Commerce into force through interim arrangements while work continues toward its incorporation into the WTO legal framework.
The WTO estimates that implementation among participating economies could increase global trade by up to $2.4 trillion by 2040, and by as much as $8.7 trillion if ultimately implemented multilaterally.
The issue has become increasingly consequential as commerce shifts toward software, cloud services, digital platforms and AI-enabled products.
Fisheries agreement shows multilateralism can still deliver
The Agreement on Fisheries Subsidies entered into force in September 2025 after acceptance by two-thirds of WTO members. It is the WTO’s first agreement with environmental sustainability at its core.
The annual report says the agreement could help protect the livelihoods of more than 250 million people who depend on the sector.
The associated Fish Fund had received more than $20 million in contributions, according to the report, to help developing economies implement the agreement.
Developing economies remain central
Least-developed countries accounted for only 1.22% of world trade in goods and commercial services in 2024, up slightly from 1.19% a year earlier. Primary products still make up more than half of LDC goods exports.
The World Trade Organization provided technical assistance to more than 13,000 government officials in 2025, many from Africa and the Asia-Pacific.
The emerging challenge is not simply connecting developing economies to trade, but positioning them to participate in higher-value sectors shaped by AI, digital infrastructure, advanced manufacturing and services.
A weaker outlook for 2026
The WTO’s March baseline projected merchandise trade volume growth of 1.9% in 2026, with conflict in the Middle East potentially reducing that to 1.4%. Commercial services trade was projected to grow 4.8% under the baseline scenario.
The report notes that continued AI investment could provide upside, but cautions that geopolitical developments and the durability of technology investment remain uncertain.
Its data cut-off was the end of May 2026.
The bigger picture
The World Trade Organization’s 2026 report points to a global economy that remains deeply interconnected, but increasingly organized around technology, resilience, security and strategic competition.
Supply chains are shifting rather than disappearing. AI is creating new sources of demand. Emerging markets are gaining ground in some sectors. And most global goods trade still takes place within multilateral rules.
The question is whether the institutions built to govern the last era of globalization can evolve quickly enough to govern the next.
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