WTO: Global Value Chain Development Report 2025

The World Trade Organisation (WTO) has released the fifth Global Value Chain Development Report, exploring how global value chains (GVCs) are undergoing a technological rewiring alongside the geopolitical shift. 

In a year which has been defined by shifting trade regulations and geopolitical turbulence, global value chains have had to evolve and adapt quickly in order to stay resilient.

Digitalisation has become a key focus for value chains, with the increase of cost savings, worker efficiency and reduced manual labour, but some countries are falling behind due to a lack of available infrastructure. 

The value chain report

Global value chains (GVCs) have been forced to demonstrate their resilience over the last two decades, however, this resilience has been tested more than ever throughout 2025, with developments from the Russian war in Ukraine, US President Trump's tariffs, climate instability and various other concerns. Business leaders are simultaneously turning to diversification of suppliers, as well as localisation and regionalisation. 

The WTO has released its fifth Global Value Chain Development Report, examining the main concerns value chains around the world have faced, the resilience they have built and how businesses are adapting for future development. The report explores changing patterns within value chains by region, as well as digitalisation strategies helping them along the way. 

GVC participation is decreasing dramatically due to system choke points causing supply chain shortages. Sectors around the world are heavily dependent on China, the EU and the US for trade, leading to bottlenecks and chokepoints when turbulence occurs in one of these regions. In 2024, only 10 economies made up 53.5% of global domestic value-added on exports. This is largely due to tactical trade rerouting and investments into certain regions.

Shifting strategies

The WTO argues that globalisation is being rewired, with trade and investment still occurring in large quantities, just in more concentrated areas. Emerging technologies in the form of AI, advanced robotics and digital platforms have worked to lower costs and increase innovation. Digital tools allow businesses to operate more flexibly and respond to turbulence on a greater scale. 

This, however, can put some regions at a greater advantage, as those with the capabilities to adopt emerging technologies will reap the benefits. For businesses in Latin America and the Caribbean (LAC) and Africa, they are facing issues with upgrading to these new GVCs, rather than being unwilling to participate. 

A Global Value Chain Readiness Index (GVCRI) which was applied across technology and connectivity, trade and investment, sustainability and energy, institutional and geopolitical, financial & business readiness, has demonstrated that LAC and Africa are lagging behind other regions. As digitisation has grown into a key priority, due to the implementation of automation and AI within operations, having an unsuitable digital backbone can put a region at risk of falling behind.

The merging of connectivity, trust, openness and human readiness allows digital transformation to become a main route for competitiveness. If a company, or a region, lacks the resources to develop this readiness and digital transformation, the integration into global value chains can be a slow process. The regions need to prioritise digital and data infrastructure and resilience strategy in order to present themselves as valuable links in the chain.

"The global economy is facing one of its most turbulent periods in decades, yet there are still reasons for optimism," explains Børge Brende, President and CEO at the World Economic Forum.

"New technologies such as artificial intelligence can drive productivity and renewed growth, just as trade did for previous generations. Cooperation remains essential, even if it looks different today."

Sustainable regulation pressures

GVCs operate within domestic and cross-border systems, meaning there is a thorough need for domestic and global environmental governance. According to the WTO, "domestic value chains accounted for 73.4% of total production-based emissions in developed economies and 79.5% in developing ones" in 2023. 

As countries around the world have varying environmental regulations, this can make compliance difficult, as well as cause issues for border adjustment complexities. Disparities also occur on a firm-by-firm basis, with costs of environmental policies affecting enterprises differently.

Regulatory measures such as carbon taxes can raise operational costs, which in turn may incentivise firms to move to other areas, with more lenient regulations. Policies can also impact innovation and technological changes, which in turn will result in structural shifts in competitiveness. By creating unified policies, GVCs can see a greater shift towards valuable changes.

Report conclusions

Fragmented GVCs are at risk of falling behind or being hit by turbulence, but the WTO report explores how this can be prevented. Though some firms are moving away from globalisation, the focus is on finding new levels of connectivity - the localisation strategies are a way of building stronger relationships and mitigating risks at the same time.

Through the forming of coordinated policies and enhanced collaboration, new supply chain partnerships will form in 2026, working to build more resilient chains. By aligning environmental policies, businesses will see a more coherent plan for global trade, helping people, the planet and efficiency.