The International Chamber of Commerce has issued a stark warning about the state of the global trading system. According to a statement from the ICC, the organization’s Secretary General addressed participants at a joint business forum with the World Trade Organization, urging decisive government action to prevent further economic instability and erosion of global trade foundations.

The remarks highlighted a severe crisis in the Strait of Hormuz, describing it as a major shock to the real economy. The ICC stated that business leaders view the situation as potentially the worst industrial crisis in living memory, citing surging energy prices and disruptions to industrial production due to shortages of gas and other essential inputs. Major companies have reportedly begun invoking force majeure on supply contracts and cutting output as shortages affect energy, chemicals, and other critical supply chains.

The organization further warned that trade disruption in agricultural fertilizers creates a real risk for the next harvest season. Farmers globally, particularly in Africa, face supply shortages and price increases that could lead to lower application of essential nutrients, potentially resulting in much lower agricultural yields and food security risks later this year. The ICC emphasized the vital need for the international community to restore safe commercial shipping passage through the Gulf and to act early to mitigate damage to the real economy.

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The Secretary General has joined a United Nations crisis initiative for the region, conveying a message from business that only a concerted international response can prevent deep economic dislocation and serious global food security risks. The WTO received credit for quickly responding with a new tool to track essential shipments through the Strait of Hormuz, which was described as practical support businesses need during a crisis.

The ICC, representing over 45 million businesses in more than 170 countries, expressed deep concern about the multilateral trading system’s current state. The trading environment today reportedly bears little resemblance to the rules-based system that previously delivered stability and growth, a system that has been eroding since the 2008 financial crisis. The challenges are described as systemic, with reform lacking a political champion for nearly two decades. The WTO’s functions of negotiation, dispute settlement, and deliberation have all stalled, while member consensus on the system’s purpose has fractured.

A new level of uncertainty is driven by geopolitical tensions, conflicts, unilateral measures, unresolved disputes, and outdated rules. Trade policy uncertainty has surged to ten times its decade-long average, and the share of world trade conducted under foundational WTO principles has fallen significantly in the last two years. The WTO’s own recent forecast projects low merchandise trade growth this year, with potential for further decline if energy disruptions persist.

For businesses, this uncertainty erodes the stability and predictability essential for trade, investment, and job creation. Geopolitical tensions are reshaping supply chains, with risk and resilience becoming dominant planning paradigms instead of growth and opportunity. This reality is particularly existential for small and medium-sized enterprises, which have the fewest resources to navigate uncertainty.

The ICC argued that inaction at the current WTO ministerial conference will not preserve the status quo but will entrench dysfunction, with each month of delay eroding the system further. A study commissioned by the organization indicates that the dissolution of the WTO would permanently lower GDP for developing countries by a significant percentage, with particular regions facing even steeper losses. These figures represent jobs, livelihoods, and development gains.

The business organization called for a formal round of reform negotiations with a concrete, time-bound work program. Reform must prioritize systemic blockages on decision-making, plurilateral agreements, and special treatment provisions. The ICC also advocated for creative solutions, including variable geometry approaches, and suggested that if consensus is impossible, a coalition of willing members should lead in an open format.

The global business community also calls for a standstill on new trade-restrictive measures that violate WTO rules for the duration of reform negotiations, as a signal of good faith. Specifically, the ICC urged making the moratorium on customs duties for electronic transmissions permanent, rather than extending it temporarily. This moratorium has kept digital trade open and affordable for over 25 years, enabling small businesses globally to access cloud services and digital platforms. Allowing it to lapse would send a damaging signal, while making it permanent would demonstrate the WTO’s ability to protect commitments to an open modern economy.

Ahead of the conference, over 230 chambers and business associations from every region signed a single statement to WTO Ministers, expressing collective anxiety and resolve. The ICC proposed building structured private sector engagement directly into the reform process, not as observers but as end-users of the system, and establishing a permanent mechanism for business engagement at the WTO. The organization concluded that the direction taken from this point is a choice, and the global business community stands ready to work alongside governments and the WTO to seize this moment.

Source: IndexBox Market Intelligence Platform