WTO Director General's Answer to Finance: Facing the impact of non trade issues, promoting dialogue is the most realistic path that the multilateral trading system can provide

Against the backdrop of escalating geopolitical conflicts and frequent use of tariffs, the global trading system is facing its most severe impact in decades.

During the 2026 Annual Meeting of the World Economic Forum held in Davos, the Director General of the World Trade Organization (WTO), Ivica, repeatedly mentioned a reality she called "surprising" at a WTO small-scale media roundtable: in a highly uncertain international environment, the multilateral trading system has not stopped functioning.

She stated that currently about 72% of global trade is still conducted within the framework of WTO rules. Compared to the level of about 80% before the comprehensive upgrade of tariffs and unilateral measures, this proportion has significantly decreased. Although this system has been impacted, surprisingly, its resilience still exists.

Promote dialogue among members

Does the current reality of intensified global geopolitical and trade frictions have a direct impact on the global trade order? In response to a question from a First Financial journalist, Ivira stated, "WTO rules are not designed to address non trade issues. ”In her view, when trade measures are used to address non trade issues, the WTO itself does not have directly applicable rules and tools.

She further explained that in such cases, the role that the WTO can play is not to arbitrate the dispute itself, but to promote dialogue among its members. The most realistic path that the current multilateral trading system can provide is to avoid non trade conflicts from further escalating into trade conflicts through communication and negotiation.

She admitted that the controversy over the "national security exception" clause is one of the most complex and controversial issues in the current multilateral trading system. The WTO cannot define the specific meaning of a country's national security, but members need to discuss relevant boundaries. She stated at the meeting that the relevant issues have been raised by multiple members in the reform discussion and will inevitably enter the agenda in the future, but the reform cannot be implemented in one step.

When talking about the phenomenon of tariffs being endowed with national security attributes, she reiterated that the WTO's function is not limited to tariff rules, but also a platform for members to discuss and resolve differences. In her view, maintaining communication is an important mechanism to prevent further disorder in the system.

Be cautious about the growth rate of goods trade in 2026

From a numerical perspective, the global trade in goods is expected to grow at a rate of 2.4% by 2025, significantly higher than the previous forecast of 0.9% in the context of tariff shocks. Ivira explained that this result is closely related to the rapid growth of trade in artificial intelligence related products, on the one hand, as companies are shipping ahead of schedule to cope with potential tariff risks, and on the other hand.

She mentioned at the meeting that about 42% of the global trade increment in 2025 will be driven by artificial intelligence (AI) related goods. She specifically mentioned that the Information Technology Agreement covers approximately $3 trillion in trade volume and maintains zero or low tariffs on a large number of AI related devices, hardware, and software, providing important support for global trade at the current stage.

For 2026, the WTO's judgment on the growth of goods trade tends to be cautious, with an expected growth rate of about 0.5%. She said that the previous year's "rush style" trade behavior was difficult to sustain, and the impact of tariffs would be more fully manifested. However, she also pointed out that if AI related trade continues to expand at its previous pace, it may still provide some support for overall trade performance.

In contrast, the growth prospects of service trade are more robust. The WTO predicts that the global service trade growth rate will be about 4.5% in 2026, with digital delivery service trade expected to grow by 5.6%. She emphasized multiple times in her speech that the focus of trade growth is undergoing structural changes.

There is a consensus on whether reform is needed

Throughout the conversation, Ivira repeatedly returned to a core judgment: the current shock is both a crisis and an opportunity for reform. She refused to simply blame the "WTO failure" and instead asked "who the WTO is". In her view, the WTO is essentially a member driven organization, where rules are formulated by members and reforms must also be driven by members.

Ivira revealed that at a small ministerial meeting held during the World Economic Forum, representatives from the United States, the European Union, the United Kingdom, as well as some African countries, emerging economies, and least developed countries participated. She described the atmosphere of the meeting as positive and believed that members had reached a consensus on whether reform was needed, with more disagreements focused on the path and priority of reform.

She summarized the current focus of reform discussions into three aspects. Firstly, there is the decision-making mechanism. She pointed out that the WTO has long adhered to the principle of consensus through consultation, but in practice it has gradually evolved into a de facto consensus, which has affected decision-making efficiency. The focus of the current discussion is not on abandoning consensus through negotiation, but on how to enhance flexibility while adhering to principles, so that some members can promote multilateral cooperation within a multilateral framework.

Next is the issue of development. Some developing members have long believed that the current rules lack support for their implementation, and the application of special and differential treatment has become a focus of discussion.

The third is a fair competition environment, including subsidies, transparency, and notification mechanisms. She emphasized that subsidy disputes are not concentrated in a single economy, and there have been long-standing differences between industrial subsidies and agricultural subsidies in different regions. The key is whether members are willing to deal with these issues directly and update the rules.

This system has helped over 1.5 billion people escape poverty, created employment, and benefited consumers. "Ivira acknowledges that the existing system is not perfect and that some people have been marginalized in the process of globalization, but she emphasizes that the answer is not to abandon rules, but to promote improvement.