How the Global Trade Landscape Is Being Transformed

The structure of global trade is undergoing a profound transformation, as services, digital commerce, and South-South trade displace goods and North-North flows as the primary engines of growth, even as rising unilateralism and protectionism disrupt supply chains and inject uncertainty into the global outlook.

According to data from the United Nations Conference on Trade and Development (UNCTAD), global trade reached approximately $33.2 trillion in 2024, a 3.7 percent increase from the prior year that reversed a 2023 decline. Trade as a share of global GDP edged up to 30.0 percent from 29.3 percent, though trade's contribution to overall economic growth remains historically weak. Between 1988 and 2007, global trade volumes expanded at roughly 1.9 times the pace of real GDP growth. Since 2011, the two measures have broadly converged — a pattern that continued in 2024, with trade volumes growing only marginally faster than output.

Services And Digital Trade Rewrite The Rules

The most consequential shift in global trade is the accelerating rise of services and digital commerce at the expense of goods. Goods trade, still the largest component at roughly $24.4 trillion, grew just 2.3 percent in 2024, adding approximately $500 billion. Services trade, by contrast, expanded 8.8 percent to around $8.8 trillion, accounting for nearly 60 percent of total trade growth for the year and lifting services' share of global trade to 26.4 percent.

Digital trade has emerged as a structural force in its own right. Total digital trade climbed from $6.0 trillion in 2021 to $7.1 trillion in 2023, a compound annual growth rate of 8.8 percent, with its share of total trade rising from 19.6 percent to 22.5 percent over the same period, according to the International Trade Centre.

Developing Economies Claim A Larger Share

Developing economies posted trade growth of 4 percent in 2024, outpacing advanced economies whose trade was essentially flat. Their share of global goods trade has risen from around 30 percent at the start of the century to 45 percent in 2023, cementing their role as the primary engine of global trade expansion.

South-South trade — commerce conducted between developing nations — grew at an average annual rate of approximately 5.5 percent over the past five years, compared with 3.3 percent for North-North trade, with regional intra-South flows driving much of that momentum. Analysts caution, however, that South-South commerce remains heavily concentrated in natural resources and relatively light on manufactured and capital goods, leaving growth exposed to volatility.

Asia Leads, Europe Lags

Regional performance diverged sharply. Asia recorded the strongest trade growth at 6.5 percent in 2024, leading globally in goods exports while services trade expanded 11.8 percent. Latin America and the Caribbean grew 5.0 percent, buoyed by South-South trade. North America was lifted by robust U.S. consumer demand driving intra-regional goods flows, while Europe's modest recovery rested almost entirely on services, with goods trade contracting 0.6 percent. Africa returned to positive territory after a negative 2023, posting a 1.4 percent increase.

A More Diversified Trade Map

UNCTAD's Global Trade Update, published in March 2025, found that both friendshoring — directing trade toward geopolitically aligned partners — and nearshoring — concentrating supply chains in proximate geographies — declined in 2024. Friendshoring volumes fell roughly 2 percent from 2023 levels, while nearshoring dropped around 1 percent, signaling a partial revival of long-distance trade. Trade concentration fell by approximately 6 percentage points, reflecting a broader diversification of global trade structures.

Bilateral Deals Fill The Multilateral Gap

As the World Trade Organization-centered multilateral system comes under pressure, bilateral and plurilateral trade arrangements have assumed greater strategic importance. The number of regional trade agreements notified to the WTO has climbed from fewer than 100 at the turn of the century to 618 by end-2024, of which 374 are in force, covering more than 90 percent of the world's countries and territories. These agreements have progressively expanded beyond tariff liberalisation to encompass regulatory coherence and other behind-the-border measures, playing an increasingly influential role in shaping global trade rules.

Green trade and digital trade continue to accelerate alongside the broadening of South-South commerce — factors UNCTAD identifies as new and durable sources of momentum for global trade growth in the years ahead.