WTO Says World Trade is Resilient, AI Leads, China in the Driver in Asia

[ABS News Service/09.10.2026]

Geneva – Global merchandise trade in volume terms has decelerated from 4.2 percent in 2025 to an updated forecast of 3.9 percent this year, amid emerging skewed trade patterns dominated by an unexpected boom in artificial intelligence infrastructure investment, the World Trade Organization reported yesterday.

Global merchandise trade volume is expected to grow at 4.7 percent in 2027, figures in the WTO’s “Global Trade Outlook and Statistics” suggest.

Merchandise trade volume growth is now projected at 3.9 percent in 2026, a figure that is “almost double the 1.9 increase foreseen in the baseline scenario in the March forecast.” Looking ahead, “merchandise trade growth is further expected to pick up slightly to 4.1% in 2027,” according to the WTO’s latest forecast.

Given trillions of dollars of investment in AI infrastructure, the growth in global trade in value terms is even more pronounced. “The US dollar value of world merchandise trade was up by 15% year on year in the first half of 2026,” compared to a 7 percent growth rate for all of 2025.

During a press conference yesterday, WTO economists noted this surge underscores the resilience of the global trading system, which has adapted to significant disruptions. However, a press release issued alongside the report suggested that this resilience was not uniform, with services trade – especially tourism – and certain regions more exposed to the effects of the Middle East conflict.

As noted in the briefing, “Higher energy prices and shipping disruptions created significant headwinds.” Yet, according to the report, businesses adjusted, supply chains adapted and producers in other regions stepped in to replace the disrupted supplies.

Resilience in Action

In her foreword to the report, Director-General Ngozi Okonjo-Iweala emphasized that “the founding logic of the (multilateral trading) system, that governments can do better for themselves – and for others – by exchanging enforceable, non-discriminatory market access commitments rather than acting unilaterally, remains as sound today as ever.”

“What has changed is the world in which that logic operates,” she noted.

In the press note, she stated: “The numbers reflect trade resilience in action.”

She added: “When disruptions strike, an integrated world economy and a rules-based trading system provide economies flexibility to keep essential products flowing to businesses and households that need them. Nevertheless, some have felt the shock more than others, and not everyone can access emerging opportunities like AI. It is essential to ensure that the rules-based trading system continues to absorb shocks and bridge gaps so that opportunities are open to all.”

Despite the conflict in the Middle East, which has had a severe localized impact – particularly on transport and travel services – the global effect on goods has been mitigated by supply chain flexibility, according to WTO economists. “Based on import statistics of partner economies, we find that the quantity of crude oil exported by the Middle East was down 24% year on year in the first half of 2026. While exports of liquefied natural gas were down 47%.”

However, these declines were absorbed globally: “Worldwide, crude oil exports only fell 6%. While LNG... were down just 1%.”

This resilience highlights the value of a rules-based system. As Chief Economist Robert Steiger explained, “This is a technical example of how the existence of a predictable rules-based trading system helps countries weather global economic shocks as it did earlier during the COVID-19 pandemic and in the wake of the war in Ukraine.”

Commercial Services

For commercial services, the impact has been more direct. “Services trade volume is expected to grow by 3.3% in 2026, down from 4.8% in the March forecast, before picking up to 6.4% in the year 2027.”

The slowdown is largely attributed to travel and transport: “Total commercial services trade growth was held back by travel, where the year-on-year increase fell from a 15% in Q1 to an estimated 5% in Q2.”

According to the WTO report, the AI investment boom has accelerated since 2025. “Trade in AI enabling goods grew 16% in value terms in 2024, it grew 31% in value terms in 2025, and it grew an astonishing 67% in the first half of 2026.”

Undoubtedly, global trade is currently being heavily influenced by AI-enabling goods. “AI-enabling goods accounted for 47% of the increase in the value of world merchandise trade in the first half of 2026, despite representing less than 15% of total merchandise trade.” The growth is led by electronic components, with traded values rising by 51percent year-on-date in the first half of 2026.

Figures in the report reveal that the geographic distribution of trade growth presents star contrasts between merchandise and services. For instance, merchandise trade is heavily concentrated in Asia. “Asian economies are set to contribute four percentage points to the 3.9% growth... Because that is more than 100% of the world growth,” the WTO’s chief economist said.

In contrast, North America contributes approximately 0.5 percentage points, and Europe adds only 0.1 percentage points. Other regions, including the Middle East, collectively subtract 0.7 percentage points from global growth.

The geography of AI trade reinforces this trend. “East Asia and Southeast Asian economies account for the majority of AI-enabling goods exports, while North America was the main source of import demand.” Specifically, “North America alone added nearly 19 percentage points to global import growth in these products” in the second quarter.

Regional Prospects

Regional trade prospects remain uneven in 2026. Asia is expected to record the fastest merchandise export growth (9.9 percent), followed by North America (5.7 percent), Africa (5.6 percent) and South America (3.4 percent). Export performance is projected to remain weak in

Europe (-0.1 percent) and to contract sharply in the Commonwealth of Independent States (-3.9 percent) and the Middle East (-17.2 percent), reflecting the impact of the ongoing conflict and associated disruptions to trade flows.

On the import side, Asia (9.5 percent), Africa (8.9 percent) and the CIS (8.8 percent) are expected to post the strongest growth, while North America (1.4 percent) and Europe (0.5 percent) are likely to see only modest increases, and the Middle East is forecast to record a steep decline (-15.4 percent).

Regarding global services trade, the report suggests that “Europe is expected to account for more than half of global service exports volume growth in 2026, contributing 2.3 percentage points to the total increase of 3.3% for the world.” Meanwhile, contributions from Asia and North America to services growth have weakened, WTO economists said.

According to the economists, North American merchandise import growth appears weak at 1.4 percent for 2026, but this figure is misleading. It “masks a strong 10.6% year-on-year decline in the first quarter of 2026, driven by front loading of imports ahead of the higher U.S. tariffs in the first quarter of 2025.” By the second quarter, growth rebounded to 5.3 percent, with annualized quarter-on-quarter growth reaching 10.1 percent, suggesting underlying strength.

The report suggested that the least developed countries have shown remarkable resilience, recording “particularly strong export growth, both in volume and value terms, with exports increasing by 25% year-on-year in value terms.”

This surge was “driven in large part by a higher demand and prices for commodities as buyers turned to alternative sources of supply” amidst Middle East disruptions.

Geopolitical Patterns

The report highlights evolving geopolitical trade patterns. While signs of broader fragmentation between rival blocs have eased, “the coupling between the US and China has accelerated and is now the main driver of divergence in global trade patterns.”

This does not necessarily mean a decline in total trade, but rather a reorientation: “There's much more trade with US and third parties and much more trade with China and third parties, but less trade between the two of them.”

Furthermore, AI trade is highly concentrated. “The top ten economies involved in AI account for over 80% of the trade in AI,” making it “twice as concentrated as merchandise trade generally.” Europe remains underrepresented in this sector, accounting for only about 10 percent of AI-enabling goods exports despite having a 35 percent share of total global exports.

When asked about risks, tariffs, and the AI “bubble,” economists acknowledged that despite the positive outlook, vulnerabilities remain. “Significant risks remain, however, due to uncertainty is elevated, and developments in the Middle East will be important determinant of the eventual outcome.”

Regarding tariffs, the WTO notes that recent changes have been “baked in” to the forecast. The modest 1.4 percent North American import growth reflects the aftermath of tariff-induced front-loading in early 2025. Globally, tariff changes in 2026 have not constituted a major shock compared to AI investment or energy price fluctuations.

On the question of whether AI investment constitutes a bubble, WTO economists remained somewhat cautious but noted structural factors. “We don't make predictions about whether it might be a bubble,” said one economist, noting that “you never know that you're in a bubble until it pops.” However, they pointed out that server vacancy rates were below 5 percent at the end of 2024, indicating that investments are serving broader digitalization needs beyond just AI applications.

Nevertheless, a slowdown in AI investment remains a key downside risk: “Any slowdown in AI investment could precipitate a slowdown in trade.”

A notable discrepancy in the forecast is that while trade growth projections have risen, global GDP growth forecasts have been downgraded since March. This is explained by the changing nature of investment. “Trade in AI enabling goods is starting to bring back that higher ratio [of trade to GDP growth]... because the investment in AI enabling goods is so import intensive.” If GDP growth were driven by residential construction, trade growth would be lower; because it is driven by high-import tech goods, trade outpaces GDP.

Promise of AI

Looking to the long term, the application of AI promises substantial benefits. “By 2040, almost 40% of world trade will rise through the application of AI trade because of a reduction in trade costs and a rise in productivity.” This suggests that while the current boom is hardware-intensive, future gains will come from efficiency improvements that could benefit low- and middle-income countries if appropriate policies are adopted.

The 2026 trade outlook is characterized by “the resilience of the global economy and trade in particular.” The system has proven capable of absorbing regional shocks through diversification and adaptation.

However, this resilience should not be confused with robustness. “Vulnerabilities remain and WTO members are working to address them. Strengthening the multilateral trading system will help ensure that the global economy is better equipped to deal with future shocks.”

The current trajectory underscores “the importance of an open, predictable, and rules-based trading system. A trading system that enables economies to adapt to disruption, redirect supplies, and respond to rapidly growing demands in new sectors.”