In the March edition of the Global Trade Update, UN Trade and Development (UNCTAD) warns that rising policy volatility and fragmentation in the global trading system risk undermining the stable conditions many developing countries rely on to expand exports, attract investment and diversify their economies.
The findings come as members of the World Trade Organisation (WTO) prepare for discussions on reform ahead of the organisation’s 14th Ministerial Conference (MC14), where governments are expected to examine how the multilateral trading system can better respond to today’s evolving economic realities.
While the report focuses on structural challenges in the global trading system, UNCTAD notes that it continues to monitor the trade implications of ongoing geopolitical developments and disruptions affecting shipping and energy markets, including those linked to tensions in the Strait of Hormuz.
Rising volatility in global trade
The report finds that the guardrails that once provided long-term stability for global trade are weakening, with certainty increasingly giving way to persistent policy volatility.
For developing economies, which often depend on a limited number of export sectors and operate with tighter fiscal space, such uncertainty can raise costs, weaken competitiveness and deter long-term investment.
Developing countries have the most at stake
Trade remains a powerful engine of development for many economies in the Global South. Export earnings support employment, finance imports of capital goods and energy, and help maintain macroeconomic stability.
Trade between developing countries has expanded dramatically, growing from about $500 billion in 1995 to $6.8 trillion in 2025, now accounting for more than a quarter of global trade.
Yet participation remains uneven. Least developed countries (LDCs) account for only about 1.1% of global exports, far below the 2% target set under the Doha Programme of Action for LDCs by 2030.
