Rethinking international subsidy rules

Bernard Hoekman and Douglas Nelson

The World Economy, 2020, vol. 43, issue 12, 3104-3132

Abstract: Geo‐economic tensions, notably associated with the rise of China, and global collective action problems—climate change and the COVID‐19pandemic—call for international cooperation to revise and develop rules to guide both the use of domestic subsidies and responses by governments to cross‐border competition spillover effects. Current WTO rules dividing all subsidies into prohibited or actionable categories are no longer fit for purpose. Piecemeal efforts in preferential trade agreements and bi‐ or trilateral configurations offer a basis on which to build but are too narrow in scope. Addressing spillover effects of subsidies could start with G20 countries launching a work programme to mobilise an epistemic community concerned with subsidy policies, tasked with building a more solid evidence base on the magnitude, purpose and effects of subsidy policies. The need for such cooperation has become even more pressing by the COVID‐19 pandemic and associated increase in the use of subsidy programmes in major economies.

Date: 2020
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https://doi.org/10.1111/twec.13022

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Working Paper: Rethinking International Subsidy Rules (2020)
Working Paper: Rethinking International Subsidy Rules (2020)
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