Introduction ------------ New trade agreements can help rebuild trust in the global trading system, but they cannot replace World Trade Organization (WTO) reform. Their value depends on whether they make trade more predictable, transparent, and enforceable, or instead deepen fragmentation by creating exclusive blocs. The most effective agreements fill gaps in existing rules, remain open to wider participation, and strengthen the multilateral system rather than bypass it. Contextual background --------------------- Trust in the trading system has weakened as governments increasingly use tariffs, subsidies, export controls, and local content rules to pursue industrial, technological, and security goals. At the same time, WTO rules have struggled to keep pace with issues such as digital trade, clean technology supply chains, and economic security, pushing countries toward bilateral, regional, and plurilateral agreements[1]. How new trade agreements can rebuild trust ------------------------------------------ ### 1. Updating rules where multilateral negotiations have stalled New trade agreements can help clarify rules in areas where WTO disciplines remain incomplete. Digital trade is a useful example. Cross-border data flows, electronic contracts, paperless trading, cybersecurity, and consumer protection are now central to commerce, but WTO rules were not designed for the digital economy. The WTO e-commerce Joint Statement Initiative shows how a subset of members can make progress when consensus among all members is difficult[2]. Such agreements can help rebuild trust when they are transparent, open to new participants, and consistent with WTO principles. They show that rulemaking remains possible even when the full multilateral system moves slowly. But if they become closed clubs, they risk creating parallel systems that smaller and developing economies struggle to influence. ### Reducing uncertainty through binding commitments Trade agreements can help rebuild trust by reducing uncertainty. Firms invest, source inputs, and enter markets based on expectations about tariffs, regulations, customs procedures, and dispute settlement. When trade policy changes abruptly, investment becomes riskier and supply chains become more costly to manage. This is especially important when higher tariffs and persistent policy uncertainty are weighing on trade and investment. Global growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 2.9% in 2026 as higher tariff rates and policy uncertainty dampen investment and trade[3]. New agreements can help reduce these risks by locking in tariff commitments, requiring advance notification of new measures, improving regulatory transparency, and creating consultation channels before disputes escalate. ### Strengthening transparency and compliance Trust depends not only on rules, but also on confidence that governments will follow them. New agreements can support that confidence by requiring members to notify subsidies, technical regulations, customs changes, digital trade rules, and import restrictions. Greater transparency reduces the risk that countries introduce measures without explanation or consultation. This is especially important for industrial policy and local content requirements. These measures may support domestic manufacturing, clean energy, or strategic sectors, but they can also distort markets when they discriminate against foreign firms or inputs. Agreements that include notification, review, and consultation procedures can make such policies more predictable and less damaging to trading partners[4]. ### Using new agreements to modernize trade rules New agreements can help rebuild trust if they serve as building blocks for wider WTO reform. Open plurilateral agreements allow willing members to negotiate rules in specific areas while leaving space for others to join later. This can help overcome WTO deadlock without abandoning the multilateral system. The key condition is that these agreements remain compatible with WTO rules, transparent in their design, and open to wider participation over time. If they are narrow, discriminatory, or geopolitically exclusive, they may weaken trust by creating overlapping standards and competing trade blocs. That would increase compliance costs, especially for smaller firms and developing economies, and encourage supply chains to reorganize around political alignment rather than efficiency. By contrast, agreements that remain open and rules-based can help modernize trade governance incrementally while preserving the WTO’s central role. ### Keeping developing economies at the table New agreements will not rebuild system-wide trust if developing economies see them as rules written mainly by advanced economies. Many developing countries face capacity constraints in digital regulation, customs modernization, environmental standards, and supply chain certification. If new agreements impose high compliance costs without support, they may widen inequalities in trade participation. Inclusive agreements should therefore include technical assistance, phased implementation, capacity-building, and flexibility where needed. This matters because fragmented trade governance risks marginalizing developing economies and widening existing inequalities[5]. Trust will be stronger if new agreements support broader participation rather than reinforce divisions between rule-makers and rule-takers. Conclusion ---------- New trade agreements can help rebuild trust in the global trading system when they reduce uncertainty, improve transparency, create enforceable commitments, and remain open to broader participation. Their greatest value is in updating rules where WTO negotiations have stalled, particularly in areas such as digital trade, supply chain resilience, green trade, and industrial policy. But they cannot replace the WTO. If new agreements support multilateral reform, they can help restore confidence in rules-based trade. If they create closed blocs, they will deepen fragmentation and further weaken trust.
