The World Trade Organization is warning that the global trading system is facing its most serious and sustained disruption in 80 years.

In its latest annual report, the WTO says growing challenges to international trade rules could have a major impact on living standards if the world moves toward a more fragmented, unilateral trading system.

The organization estimates that a return to unilateral trade policies could reduce global gross domestic product by about five per cent and cut exports by 18-point-six per cent by 2050.

The WTO says the multilateral trading system is now at a decisive stage, stressing that international trade cooperation has helped narrow income gaps between developing and advanced economies and contributed to global peace.

WTO Director-General Ngozi Okonjo-Iweala has also warned that, despite major changes in the global trading landscape, the principle that countries benefit more from cooperation than unilateral action remains as relevant as ever.