Spillovers, Subsidies and Multilateral Cooperation Addressing Concerns Over Industrial Subsidies. Bertelsmann Working Paper 29/02/2020

Hoekman, Bernard and Nelson, Douglas (2020) Spillovers, Subsidies and Multilateral Cooperation Addressing Concerns Over Industrial Subsidies. Bertelsmann Working Paper 29/02/2020. [Working Paper]

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Abstract

Negative international spillovers created by nontariff policies are a rising source of trade tensions and conflicts. The WTO does not include rules for subsidies for services industries, state-owned enterprises or investment in-centives. Existing disciplines on industrial policies are increasingly seen to be inadequate by many WTO members. Efforts to revisit and expand rules for contested policies must recognize the changing nature of international production. A first step in addressing trade conflicts associated with industrial policies is to determine where negative international competition spillovers are both large and systemic in nature. Doing so requires going be-yond trade ministries and bringing in finance and line ministries, as well as competition agencies and international organizations with expertise in collecting information on subsidies and analyzing their effects.

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