Corporate subsidies by China, the EU, and the US: Time for reforms?
Published 30 November 2021
Corporate subsidies are a major source of controversy in the global trading system. Despite its harmful effect on mutual trust and reciprocity among trading nations, at present there are no serious attempts to find common ground. In this recording of our recent webinar, a panel of experts explore ways to reinvigorate multilateral cooperation on the issue.
The distorting effects of subsidy regimes have pervaded global trade and gathered strength with every passing year of inaction – to the detriment of public trust in trade and globalization. The damage inflicted by subsidies is not merely economic. Subsidies perpetuate an unsustainable cycle of mimicry and retaliation, as proven by the number of disputes they spark.
- Simon Evenett, co-author of 28th report of the Global Trade Alert, Subsidies and Market Access: Towards an Inventory of Corporate Subsidies by China, the European Union, and the United States, presented the report’s findings – most alarmingly, evidence consistent with tit-for-tat actions by China, the US and the EU, when related to subsidies. The policy implications suggest the need for an informal, evidence-based dialogue on four substantive matters related to subsidies: its scope, necessity, an improved system for information, and an assessment of the adequacy of WTO rules.
- Gary Sampson, Professor of International Trade at the University of Melbourne, Australia, highlighted the importance of transparency and information to determine the magnitude of subsidy regimes and to correct any trade distortions. To redress the paucity of WTO notifications, he suggests the need for an information database on corporate subsidies to assist with policy making decisions.
- Weihuan Zhou, Associate Professor of Law at the University of New South Wales, Australia, shared his observations on China's subsidies, the role of the WTO, and how future negotiations could progress. He argued that China’s obligations under the WTO agreements have the potential to address the country's industrial subsidies, which may be easier to identify than is typically perceived.
The webinar, moderated by Associate Professor Kaewkamol (Karen) Pitakdumrongkit of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore, concluded with a question & answer session with the panel of experts.
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