Even as protectionist policies gain ground, a growing web of regional and bilateral trade deals is reshaping global commerce. These deals are helping offset the impact of sharply higher U.S. tariffs, while easing non-tariff barriers and expanding access to key markets.
Their effects are already visible in shifting trade and investment flows, as companies and countries realign supply chains in response to new geopolitical and economic incentives.
With as much as $14 trillion in global trade expected to move to new routes over the next decade, trade deals are emerging as a powerful catalyst for opening markets, redirecting capital and redefining how businesses pursue growth worldwide.
From a multilateral order to a fragmented trade landscape
For much of the postwar period, global trade was shaped by multilateral agreements negotiated under institutions such as the World Trade Organization, which helped make nearly two-thirds of international trade tariff-free by 2023 and supported a fivefold expansion in global GDP between 1945 and 2000.
Since the turn of the century, however, trade diplomacy has grown increasingly fraught. Unilateral tariffs, rising geopolitical rivalry and weakening dispute-resolution mechanisms have steadily eroded confidence in the WTO’s ability to arbitrate and enforce global trade rules, prompting the organization itself to acknowledge by 2015 that a new negotiating model was needed.
Public resistance to globalization, driven by concerns over deindustrialization, competition from lower-cost labor markets and immigration, has further disrupted the system, contributing to high-profile political breaks such as the U.S. rejection of the Trans-Pacific Partnership and the UK’s exit from the European Union.
By 2025, with trade tensions escalating and policy coordination fragmenting, the rule-based framework that once allowed companies to plan cross-border investments with relative certainty has become increasingly tenuous.
Despite these setbacks, countries remain eager to engage in cross-border trade. In fact, between January 2017 and May 2025, the number of regional trade deals increased by 30 percent, with a fivefold rise since 2000, said McKinsey & Company in a recent report. Bilateral trade agreements have grown three percentage points per annum faster since 2000, at 7 percent annually.
The rise of sector-specific trade deals
Alongside bilateral and regional deals, governments are increasingly pursuing sector-specific trade agreements aimed at addressing gaps that traditional trade frameworks struggle to cover. Technology has emerged as a leading focus, as rapid innovation continues to outpace trade policy. Modern agreements now routinely include digital trade provisions governing data flows, artificial intelligence and online services.
Energy and finance are also becoming central pillars of sector-led trade diplomacy. Energy-focused agreements increasingly balance supply security with sustainability, as seen in the U.S.-Japan critical minerals pact and the expanding clean-energy cooperation between India and Brazil, which leverages complementary strengths in renewables and biofuels.
In finance, trade deals are prioritizing regulatory alignment to support cross-border digital services, with the EU-Singapore Digital Trade Agreement streamlining fintech licensing, enabling data sharing and setting standards for digital assets and decentralized finance.
Labor standards, meanwhile, are being negotiated more aggressively and often separately, reflecting their political sensitivity and growing prominence. Recent agreements such as the USMCA and pending EU-Mercosur deal impose stricter labor and due-diligence requirements, signaling that modern trade deals are no longer just about tariffs, but about shaping how industries operate, regulate and expand across borders.
Read: China’s trade surplus surpasses $1 trillion on strong exports despite U.S. decline
How businesses can seize opportunities in new trade deals
Before committing capital on the basis of trade agreements, companies need to assess how durable those agreements are likely to be. Early political announcements often leave significant room for reversal or renegotiation, particularly as domestic priorities shift. As negotiations advance, countries typically sign framework agreements that signal intent and outline broad areas of cooperation, but many key terms remain unresolved.
That said, companies do not need to wait for full ratification to begin positioning themselves for change. Even during the negotiation phase, trade talks can provide valuable signals about future market access and regulatory alignment. Business leaders can use this window to rethink supply chains and operating models, identify emerging growth markets, explore mergers, acquisitions and joint ventures, and evaluate readiness to comply with evolving rules on data, digital trade and talent mobility. Those who act early are often better placed to capture first-mover advantages once agreements take effect.
As regional and bilateral trade agreements multiply, they are opening doors to markets that lie beyond traditional global trade frameworks. While navigating this growing web of deals adds complexity, companies that understand the evolving dynamics between countries and industries early can gain a decisive first-mover advantage. Those that remain agile, well-informed and proactive will be best positioned not just to adapt, but to thrive in an increasingly intricate and opportunity-rich global trade landscape.
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