The United Nations Conference on Trade and Development (UNCTAD) is calling for a comprehensive revival of the global trade dispute settlement system, warning that recent geopolitical upheavals and discriminatory policies are disproportionately harming developing economies such as the Philippines.

In a report, the Geneva-based trade body said global trade rules pioneered by the World Trade Organization (WTO), which sought to create a stable trading system, have become less predictable in recent years due to the rise of discriminatory trade measures.

Policies such as tariffs, investment screening, and technology restrictions have placed developing economies at a massive disadvantage, especially since they rely on a predictable trade environment to expand beyond domestic markets.

“For smaller economies, access to international markets is particularly important because domestic demand alone is often too limited to sustain strong growth,” the report read.

Based on UNCTAD data, trade between developing countries has grown exponentially, from around $500 billion in 1995 to $6.8 trillion last year.

To sustain this momentum, the trade body is recommending reforms to the WTO system to help developing economies fend off restrictive trade measures.

UNCTAD said this could be achieved through a more effective dispute settlement system, which was established to allow countries to challenge trade measures that violate agreed-upon global trade rules.

“A functioning dispute settlement system helps smaller economies defend their trade rights on equal footing,” it said.

The system, however, has weakened in recent years due to a lack of quorum in the WTO’s Appellate Body—the final stage in the dispute process—stemming from the blocking of new judge appointments since 2019.

To put this into context, WTO members initiated an average of 19 consultations per year between 2010 and 2019, which fell to 8.5 per year between 2020 and 2025.

“WTO reform should therefore strengthen mechanisms that help developing countries integrate into global markets, diversify exports and move up the value chain,” said UNCTAD.

Apart from the dispute settlement system, UNCTAD said there should also be clearer rules in key sectors such as digital trade, financial services, and professional services to strengthen the participation of developing economies.

In addition, it also pushed for stronger special and differential treatment to provide developing countries with greater flexibility and support within trade agreements.

“This will help ensure that global trade remains a driver of inclusive growth and sustainable prosperity in the decades ahead,” said UNCTAD.

UNCTAD’s call for reforms to the WTO comes at a time when the global trading system is facing disruptions due to the conflict in the Middle East, particularly tensions in the Strait of Hormuz, a key maritime route for global oil supply.

“The current shock comes at a time when many developing economies struggle to service their debt, tightening fiscal space and limited capacity to absorb new price shocks,” it said in a separate report.

For its part, the Philippines earlier urged its neighboring countries in the Association of Southeast Asian Nations (ASEAN) to keep trade open as part of its commitment to advancing the regional bloc’s economic integration agenda.

In a joint statement last week, ASEAN economic ministers have since agreed to maintain open trade and investment policies through a transparent and predictable regional economic architecture.