This article was first published by the Hinrich Foundation.
The global trading-system is undergoing a profound transformation. What was once a rules-based order overseen by the World Trade Organization (WTO) is gradually giving way to a far less stable landscape, one defined by fragmentation, ad-hoc deals, and tariffs deployed as bargaining chips.
In this emerging environment, power increasingly substitutes for rules. Governments, wary of constraints have growing incentives to preserve discretion and respond to trade restrictions unilaterally in kind.
Notifying trade measures at the WTO, once the cornerstone of transparency, can now amount to admitting inconsistencies with its already strained and imperfect rulebook. The result is a trading system that is not only weaker, but increasingly opaque.
Transparency, therefore, is no longer a technical requirement. It is becoming one of the last remaining tools to preserve predictability and to impose some discipline on the return of raw power politics.
This shift is not just theoretical — it is visible in practice. The global economy is moving from an imperfect rules-based order to what may be called a “perfect deals-based disorder”.
As this transition unfolds, transparency becomes inconvenient.
Reporting trade measures can expose legal gray areas or outright violations, limiting the political discretion — read “arbitrariness” — on which power-based strategies increasingly rely. So opacity is not accidental. It is becoming strategic.
The digital economy’s “Orwellian trap”
This problem deepens as trade evolves. Digitally delivered services, the fastest growing component of international trade, are transforming how value is created and exchanged.
At the same time, the erosion of the “most-favoured-nation” principle and the rise of bilateral trade agreements have exposed the need to use rules of origin to enforce trade preferences.
This already creates a complex bilateral spaghetti bowl of overlapping trade regimes. But in the digital economy, the situation becomes far more problematic.
Rules of origin work for goods, which are physical products that can only be at one place at the time. They do not translate easily to data as bytes that can be replicated, stored, and transmitted across multiple jurisdictions.
Meanwhile, trade in goods is increasingly bundled with digital services, further blurring the distinction.
The result is a conceptual breakdown: the very notion of “origin” becomes unstable as digital services are produced across multiple jurisdictions, stored in dispersed locations, and delivered simultaneously across borders.
This creates what can be described as an “Orwellian trap”: The more we try to enforce trade preferences in the digital economy, the more we risk legitimizing Big Brother’s surveillance and control.
Either trade rules become difficult to enforce, or enforcement requires intrusive monitoring of data flows.
Geopolitically, this can backfire. Efforts to exclude certain actors from digital ecosystems may push countries toward greater state control, more fragmented regulatory regimes, and less, not more, openness.
Energy shocks and the return of interventionism
Overlay this with energy shocks — whether geopolitical or linked to the green transition — and the picture darkens further. Rising costs trigger industrial policy responses and defensive trade measures.
Governments intervene more directly in economic activity, often influencing corporate decisions, a trend that is not confined to any one country or system. Yet these measures are increasingly adopted without full transparency, reinforcing a pattern of opacity and interventionism.
A widening information gap
At the WTO, transparency obligations exist — but they rely on self-notification where compliance is uneven, often delayed, or outright omitted.
There are no meaningful consequences for failing to report. This has created understandable frustration particularly among more transparent economies, notably the United States. More importantly, geopolitical tensions are creating incentives to avoid formal notifications. The result: a widening gap between what governments do and what the WTO can observe.
An underused solution at hand
Where, then, can the missing information come from?
Part of the answer comes from institutions that have what the WTO lacks: a permanent, on-the-ground presence.
The International Monetary Fund (IMF) and the World Bank maintain continuous engagement with national authorities through their Resident Representatives and Country Offices. They collect detailed, real-time information on economic policies and developments. This gives Bretton Woods institutions a surveillance capacity that the WTO lacks.
In other words, the IMF and the World Bank often know what governments are doing, even when governments do not formally report it to the WTO.
The irony is that the system already contains the tools needed to close the transparency gap. No institutional changes would be required as the IMF, the World Bank, and the WTO already have formal cooperation agreements, and the WTO’s founding Marrakesh Agreement explicitly calls for cooperation among these institutions to achieve “greater coherence in global economic policy-making”.
Closer cooperation between these three institutions could be advanced through administrative decisions, without requiring new negotiations or political consensus. It could be advanced by integrating WTO trade monitoring, IMF macroeconomic surveillance, and the World Bank’s development policy analysis.
Transparency as a stabilizing force
Such cooperation would not restore the rules-based order overnight. But it would significantly reduce informational gaps and help reintroduce a minimum level of predictability.
And in today’s environment, predictability is not a luxury. It is a stabilizing force. As the global system becomes increasingly shaped by raw power, middle powers have limited leverage in bilateral bargaining. But they do have agency as they can defend transparency, support institutional cooperation and push for better information-sharing. Because if power is replacing rules, then transparency is not just a technical requirement. It may be multilateralism’s last line of defense.
