The dynamics of world trade are changing rapidly. For the last few years, the developed countries are redefining the rules of world trade which are detrimental to the growth and sustenance of the developing countries. On one hand, they are protecting their economies by raising tariff and non-tariff barriers, and on the other, they are preaching to the developing countries to open their markets to their companies. This has disrupted world trade as never before. The developing countries cannot take this blow as they are heavily dependent on the markets of developed countries. This has led to an alarming situation where world trade is undergoing a sea change — supply chains are broken, goods prices are negatively impacted, unemployment rising, manufacturing base dwindling — leading to a slowdown of growth and, in some cases, even going down south as the debt burden rises for the vulnerable economies.
The warning from the United Nations that the “rules-based trading system is at risk of derailment” could not have come at a more crucial time. What was once envisioned as a fair, multilateral framework promoting global growth has today turned into a fragmented, unequal battlefield — one where the developing world is at the receiving end. At the heart of this crisis lies a stark asymmetry. The very nations that once championed free trade — primarily the United States and its Western allies — are now rewriting the rules to serve domestic interests. As Guterres pointed out, some least-developed countries face tariffs as high as 40 per cent, despite contributing less than one per cent to global trade. This is not trade liberalisation; it is economic marginalisation. For developing nations, the consequences are devastating. Many are already trapped in debt.
Tariff hikes and disrupted supply chains only deepen this vulnerability. As global supply chains reel from uncertainty, foreign investment retreats, and inflation bites, these countries are left with little fiscal space to rebuild or reform. Meanwhile, the US and the European Union continue to heap subsidies, trade barriers, and technology export controls on the developing countries, choking their industries.
The new trade order is turning into neo-protectionism — where access, technology, and innovation remain the monopoly of the Western world. Guterres’ observation that “we are investing more in death than in people’s prosperity” captures the moral dimension of this crisis. The global trade and financial systems, designed to lift nations out of poverty, are now reinforcing inequality. These institutions must be revived and tailored to meet the needs of developing nations.
The path forward demands courage and cooperation. International financial institutions must be restructured to reflect the realities of the twenty-first century. Trade rules must be rewritten through genuine multilateral dialogue — anchored not in dominance but in shared prosperity. In the long run, it will not just be developing nations that suffer — the very foundation of global stability will. Guterres’ warning is not just a diplomatic statement; it is a call for economic justice.
