Rethinking international subsidy rules

Hoekman, Bernard M.; Nelson, Doug

doi:10.1111/twec.13022

Cited by 38 publications

(35 citation statements)

References 56 publications

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“…It does cooperate with other international organizations that have greater analytical capacity and expertise in the preparation of ad hoc reports but does not collaborate in work programs that address matters of interest to (subsets of) the WTO membership. An example would be collaboration to assess the extent and incidence of subsidy programs in systemically important economies, bringing together national Finance and Economy ministries, and relevant international organizations such as the IMF and the World Bank (Hoekman and Nelson, 2020). A solid information base on the incidence of subsidies and size of potential trade distortions is a necessary input into any negotiation on new rules of the game.…”

Section: Preparing the Ground For Negotiationsmentioning

confidence: 99%

WTO Reform: Back to the Past to Build for the Future

Hoekman

Mavroidis

2021

Global Policy

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Since its formation, with a few notable exceptions, WTO members have not been able to negotiate new rules on policies that generate negative international spillovers. The Doha Development Agenda negotiations, launched in 2001, became deadlocked in 2008. Problems extend beyond negotiationsother functions of the WTO are also not performing well. The dispute settlement mechanism, long perceived as the crown jewel of the organization, no longer is operational because of US refusal to appoint new WTO Appellate Body members. Calls for WTO reform have been mounting. This article provides an overview of the WTO reform agenda, drawing on the findings of recent multidisciplinary research to provide context for the papers included in this special issue on trade conflicts, multilateral cooperation and WTO reform. Policy Implications• The WTO faces two interconnected challenges: reestablishing an effective dispute settlement mechanism and reviving the negotiation function. Doing one and not the other will not suffice to revitalize multilateral trade cooperation.• Overcoming the legislative crisis calls for direct engagement among China, the EU and the US on new rules for subsidies, state-owned enterprises and industrial policy. Agreement to address associated policy spillovers is needed to permit reestablishment of an Appellate Body.• Negotiations on open plurilateral agreements among groups of WTO members are a way to address the WTO consensus working practice constraint and to complement traditional trade agreements with issue-specific cooperation among likeminded economies.• Reforms should build on innovations adopted in several WTO bodies to open and encourage greater participation by stakeholders in committee meetings, including business, regulators, and other international organizations.• The WTO reform agenda should include a focus on improving the ability of the Secretariat to provide information and analysis, link the WTO to epistemic communities in regulatory policy areas that are salient for trade, and ensure that adjudicators at the panel and appellate level fully control the WTO dispute settlement system.

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Section: Preparing the Ground For Negotiationsmentioning

confidence: 99%

WTO Reform: Back to the Past to Build for the Future

Hoekman

Mavroidis

2021

Global Policy

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“…On the other hand, with the generally low tariff levels, subsidies are being increasingly used by governments in Forum both high-income and emerging economies as a substitute for protection (Evenett, 2019;Hoekman and Nelson, 2020). Most importantly, the increase in value-chainbased production and trade that is highly correlated with an expansion in FDIs (OECD, 2013) is expected to limit the incentives to use traditonal trade policy instruments such as tariffs, and to increase the incentives to use subsidies (Hoekman, 2016).…”

Section: Fair Tradementioning

confidence: 99%

EU Trade Policy in Light of the New Industrial Strategy for Europe

Schaus

2021

Intereconomics

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“…This, of course, makes agreement on how to measure spillovers an issue of first-rate importance. Hoekman and Nelson (2020) argue that this is an area where collective effort by all the core nations of the trade regime, very much including China, would benefit from collective capacity building.…”

Section: Subsidies Spillovers and Tradementioning

confidence: 99%

How Do You Solve a Problem Like Maria?US – Countervailing Measures (China) (21.5)

Nelson

2021

World Trade Review

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The rise of China as a genuine world power, economically and militarily, constitutes the gravest challenge faced by the liberal international order constructed in the aftermath of the Great Depression and the Second World War. A major source of strain in the trade relations between China and the other core members of the liberal world trading system is its extensive use of state-owned enterprises as an instrument of general (domestic) economic policy. This paper builds on Ruggie's theory of embedded liberalism and the theory of economic policy to characterize the political and economic difficulties and opportunities in moving toward a new regime for dealing with subsidies. The conclusion sketches some goals such a regime should seek to embody.

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Rethinking international subsidy rules

Cited by 38 publications

References 56 publications

WTO Reform: Back to the Past to Build for the Future

WTO Reform: Back to the Past to Build for the Future

EU Trade Policy in Light of the New Industrial Strategy for Europe

How Do You Solve a Problem Like Maria?US – Countervailing Measures (China) (21.5)

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