Subsidies and SOEs : specific vs. systemic spillovers

Abstract

In this paper we focus on a rising source of international trade ten-sions: national subsidy policies. This is not simply a ‘China issue’ nor is it lim-ited to ‘industrial’ subsidies as distinct from agricultural subsidies, which has been the primary focus of wto membership. Subsidies constitute the great majority of trade interventions imposed since 2009 (Evenett, 2019). The use of subsidies increased greatly in 2020 as governments everywhere responded to the covid- 19 pandemic. While these interventions are driven by public health and (macro- )economic considerations, industrial policy motivations may also figure and many of the interventions can have competitiveness spillovers. Bolstering international cooperation to help control negative, and more effectively realize positive, spillovers has become even more important in safeguarding and extending the rules- based multilateral trade regime.