Title: Revisiting WTO Subsidy Rules in a Changing Global Landscape: Problems and Prospects

Authors: Sun Anyi, Peng Delei

Abstract: Growing concern for economic security, intertwined with geopolitical tensions, has triggered a heightened risk of subsidy race among major economies, such as the US, the EU and China. Yet, the WTO subsidy rules are mostly ineffective in regulating emerging subsidies, because of their unclear definition of “subsidy”, rigid identification criteria for “unacceptable” subsidies, lack of services subsidiy rules and weak remediation and grievance redressal mechanisms. These deficiencies underline the need for a more comprehensive set of multilateral disciplines on subsidies to enable us to respond better to the complex realities. The new subsidy rules in recent preferential trade agreements (PTAs) could serve as a useful stepping stone towards WTO subsidies reforms. However, very limited progress has yet been made on the WTO level due to the diverging views of WTO members. This paper argues that enhancing transparency disciplines is a more realistic reform direction to consider. In this way, members can promote dialogue and build trust, develop a better understanding of the impacts of subsidies and, consequently, reach a consensus on new and improved subsidy rules in the interests of all.

Keywords: Subsidy Rules, Agreement on Subsidies and Countervailing Measures (ASCM), WTO Subsidies Reform, Subsidy Disciplines