Wednesday | 02 Dec 2020
20 Dec 2019

INDUSTRIAL SUBSIDIES, STATE-OWNED ENTERPRISES AND MARKET DISTORTIONS

PROBLEMS, PROPOSALS AND A PATH FORWARD

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Originally Published: Institute for International Trade at the University of Adelaide, 20 December 2019

Industrial subsidisation is an area identified for WTO rule-strengthening by the European Union and the Trilateral Trade Ministerial Cooperation. The aim is to curb certain trade practices spearheaded by China’s state-owned enterprises, which allegedly engender over-capacity, distort markets and undermine the effectiveness of the WTO Agreement on Subsidies and Countervailing Measures (ASCM). The obligations of transparency and notification prescribed by the ASCM require strengthening, too. In this regard, this policy brief explains the context, and describes why. It then recounts the various initiatives to rectify the ASCM, and finally analyses the drawbacks of these initiatives and suggests a practical way forward.

Read this policy brief here.