Global trade: key challenges and the future of the WTO
Aug 2025
Enabling world-class research
(Now former) WTO Chief Economist Ralph Ossa shares his insights into the evolving global trade landscape. As trade faces growing challenges, including rising protectionism and environmental concerns, Ossa argues that international trade remains a crucial tool for addressing global issues like climate change and economic inequality. In this article, he explores the need for strategic collaboration between policymakers and academics, the importance of understanding global dependencies, and the vital role of the WTO in shaping the future of trade.
Pressing challenges to address
- How can trade address global security and peace?
- How to reduce poverty and inequality through trade?
- How can trade manage the digital revolution?
Global trade: a vital part of the solution
As the Chief Economist of the World Trade Organization (WTO), I’m constantly reminded of the importance of international trade in solving some of the world’s most pressing challenges. Trade is not only crucial for maintaining peace and security, but also for reducing poverty and inequality, fostering a sustainable economy, and managing the ongoing digital revolution. Unfortunately, many now perceive trade as part of the problem, contributing to the globalization crisis we are currently experiencing. This perception needs to change.
Bridging the gap: the need for dialogue between academics and policymakers
Having spent two years at the WTO, I have become more convinced than ever of the need for genuine dialogue between academics and policymakers. Too often, we talk past each other, with both sides skeptical of the other’s work. I firmly believe that meaningful exchange between these communities is essential. It can help identify the most pressing questions and relevant answers, which in turn can drive progress in both academia and policymaking.
Why trade questions remain unresolved
Despite the glaring challenges posed by globalization, much of the academic trade community is focused elsewhere. Recently, the trend in economics has shifted toward quantitative economic geography, which, while valuable, isn’t addressing the most urgent questions we face today. In my view, this reflects a broader issue within the profession: Graduate students often prioritize their advisers’ papers over engaging with real-world issues like trade wars or the economic consequences of globalization. I’m proud to say that the trade community at the UBS Center stands as a clear exception to this trend. Colleagues like David Dorn and David Hémous are working on highly relevant and impactful research that directly addresses the most pressing challenges of our time.
The global trade crisis: protectionism and its consequences
While the WTO faces its challenges, its relevance remains undeniable. More than 75 % of world trade still takes place under WTO rules, which are governed by the most-favored-nation principle. Despite the rise in regional trade agreements and disputes, particularly between the U. S. and China, the WTO remains a cornerstone of global trade. Global trade in goods continues to grow, which proves that trade remains a vital tool in tackling global issues, including climate change. The key, however, is not to fall into the trap of believing that the WTO is irrelevant. If every country simply acted in its own self-interest, without the framework the WTO provides, we would face serious problems.
Trade and the environment: a misunderstood relationship
One of the biggest misconceptions I encounter is that trade contributes to environmental harm due to transportation emissions. This view is flawed. In fact, trade is part of the solution to the climate issue, not part of the problem. Besides transportation emissions, we must consider emissions from production, which vary significantly between countries. This gives us an opportunity: Countries should specialize in the sectors where they have a comparative advantage in terms of lower emissions. By focusing on areas where they can produce more efficiently and with fewer emissions, countries can contribute to reducing global emissions. This is why trade and environmental policy need to be more closely interconnected.
The security debate: how protectionism threatens global trade
The rising tide of protectionism is putting global trade under immense pressure. As countries become increasingly focused on security concerns, the narrative of trade as a weakness is gaining traction. But I firmly believe that countries focusing solely on their own independence are ultimately investing in their own weaknesses. Trade has always been about capitalizing on strengths, not isolating oneself from the global economy. Instead of aiming for complete self-sufficiency, nations should strategically identify their comparative advantages and invest in them. In doing so, they can ensure that international trade continues to strengthen their economies, rather than weakening them.
The future of trade and the WTO: adapting to new realities
Looking to the future, I remain optimistic about the WTO’s role in the global economy. The WTO must continue to adapt to new global realities, but the rules and framework it provides remain as important as ever. The challenges posed by geopolitical tensions, regional trade agreements, and emerging digital commerce must be addressed, but I am confident that the WTO will remain a key player in shaping the future of global trade. As we continue to navigate these challenges, I believe the WTO will evolve in a way that ensures trade remains a powerful tool for peace, prosperity, and sustainable development.
The role of the UBS Center in advancing global trade research
The UBS Center plays a crucial role in advancing research in international trade. It has become a hub for important work that bridges the gap between academia and the policy world. The center brings together some of the best minds in economics to work on the most pressing global trade issues, and its influence extends beyond academia, fostering valuable dialogue with the wider community. The work being done at the UBS Center is critical to addressing the challenges we face today in global trade and ensuring that trade continues to play a positive role in shaping the future of our global economy.
(Now former) WTO Chief Economist Ralph Ossa shares his insights into the evolving global trade landscape. As trade faces growing challenges, including rising protectionism and environmental concerns, Ossa argues that international trade remains a crucial tool for addressing global issues like climate change and economic inequality. In this article, he explores the need for strategic collaboration between policymakers and academics, the importance of understanding global dependencies, and the vital role of the WTO in shaping the future of trade.
Pressing challenges to address
- How can trade address global security and peace?
- How to reduce poverty and inequality through trade?
- How can trade manage the digital revolution?
Global trade: a vital part of the solution
As the Chief Economist of the World Trade Organization (WTO), I’m constantly reminded of the importance of international trade in solving some of the world’s most pressing challenges. Trade is not only crucial for maintaining peace and security, but also for reducing poverty and inequality, fostering a sustainable economy, and managing the ongoing digital revolution. Unfortunately, many now perceive trade as part of the problem, contributing to the globalization crisis we are currently experiencing. This perception needs to change.
Bridging the gap: the need for dialogue between academics and policymakers
Having spent two years at the WTO, I have become more convinced than ever of the need for genuine dialogue between academics and policymakers. Too often, we talk past each other, with both sides skeptical of the other’s work. I firmly believe that meaningful exchange between these communities is essential. It can help identify the most pressing questions and relevant answers, which in turn can drive progress in both academia and policymaking.
Ralph Ossa is the UBS Foundation Professor of Economics in the Department of Economics at the University of Zurich.
Quotes
Those who focus on their independence invest in their weaknesses
Trade remains part of the solution, not the problem.
Economic challenges of our time
From rising inequality and global trade tensions to climate change and the impact of artificial intelligence on labor markets – economists today are grappling with fundamental questions that will shape our collective future. In this special edition of the Public Paper series, all affiliated professors of the UBS Center share their perspectives on these challenges. Their contributions highlight how cutting-edge research conducted at the Department of Economics at the University of Zurich can help us better understand – and potentially solve – some of the most urgent issues of our time.
It is precisely this ambition that defines the UBS Center for Economics in Society. Since its founding, the Center has served as a platform for dialogue between academia, business, and policymakers and as a catalyst for excellence in economic research. That vision goes back to Kaspar Villiger. As the founding Chairman of the Foundation Council, he played a pivotal role in establishing and shaping the UBS Center.
With this fifteenth edition of the Public Paper series, we honor Kaspar Villiger’s extraordinary contributions and legacy. By strengthening research capacity at the University of Zurich and fostering public dialogue around key societal questions, his vision continues to inspire the Center’s mission: bridging knowledge and society to build a better future.
From rising inequality and global trade tensions to climate change and the impact of artificial intelligence on labor markets – economists today are grappling with fundamental questions that will shape our collective future. In this special edition of the Public Paper series, all affiliated professors of the UBS Center share their perspectives on these challenges. Their contributions highlight how cutting-edge research conducted at the Department of Economics at the University of Zurich can help us better understand – and potentially solve – some of the most urgent issues of our time.
It is precisely this ambition that defines the UBS Center for Economics in Society. Since its founding, the Center has served as a platform for dialogue between academia, business, and policymakers and as a catalyst for excellence in economic research. That vision goes back to Kaspar Villiger. As the founding Chairman of the Foundation Council, he played a pivotal role in establishing and shaping the UBS Center.
Ralph Ossa on Google Scholarbrowse
Fragmentation in global trade
Author
UBS Foundation Professor of Economics
Ralph Ossa, who served as Chief Economist of the World Trade Organization (WTO) from January 2023 to June 2025, took up the UBS Foundation Professorship of Economics at the Department of Economics of the University of Zurich (UZH) as of July 1, 2025. Before joining the WTO, Ralph Ossa was already teaching and conducting research at UZH in the field of international economics, with a particular focus on policy-relevant questions. He was chairman of the Department of Economics from 2019 to 2022 and coeditor of the Journal of International Economics from 2016 to 2022. Prior to Zurich, he was on the faculty at the University of Chicago Booth School of Business. He holds a PhD in Economics from the London School of Economics.
UBS Foundation Professor of Economics
Ralph Ossa, who served as Chief Economist of the World Trade Organization (WTO) from January 2023 to June 2025, took up the UBS Foundation Professorship of Economics at the Department of Economics of the University of Zurich (UZH) as of July 1, 2025. Before joining the WTO, Ralph Ossa was already teaching and conducting research at UZH in the field of international economics, with a particular focus on policy-relevant questions. He was chairman of the Department of Economics from 2019 to 2022 and coeditor of the Journal of International Economics from 2016 to 2022. Prior to Zurich, he was on the faculty at the University of Chicago Booth School of Business. He holds a PhD in Economics from the London School of Economics.