Brussels : The World Trade Organization (WTO) has flagged growing fragmentation in international trade with an over-nine fold increase in the number of trade concerns raised in just the last six years. Trade concerns raised at WTO committees are seen as an early indicator of trade disputes.

The UN trade body cited unilateral measures like Indonesia’s export restrictions on raw materials, China’s restrictions on gallium and germanium exports, the European Union’s Carbon Border Adjustment Mechanism (CBAM) and other EU Green Deal measures, and the US Inflation Reduction Act (IRA) as the chief concerns expressed by nations.

WTO warned that unilateral trade measures could lead to a downward spiral of tit-for-tat responses and a more fragmented world, dominated by regional trade blocs —a development that it said could be difficult to reverse.

“Consistent with the pattern observed in technical committees, there has been a nine fold increase in the number of trade concerns raised at the Council for Trade in Goods between 2015 and 2022,” WTO said in a report.

Pointing to the rapid expansion of trade in digital services and environmental goods, it said a further increase in unilateral measures could fragment the world economy.

A renewed drive toward integration—“re-globalization”— is the way to tackle current problems of security, poverty and climate change, it said, as it touched upon growing scepticism about the progress of globalization.

Discussions on the stagnation, or even decline, of the role played by international trade in the global economy pointed to a rise in new industrial strategies, limits to global supply chains’ expansion as well as rising geopolitical tensions, WTO said.

Trade strategies to re-shore manufacturing production would lead to an overall decline in the importance of trade in the global economy.

“Other strategies such as bringing production closer to large markets (near-shoring) or strengthening production networks with like-minded countries (friend shoring) would lead to fragmentation of the global economy along regional and geopolitical lines,” it further added.