Reforming industrial subsidies usage through the WTO: process proposals

By Professor Peter Draper, Executive Director and Dr Naoise McDonagh, Lecturer, Institute for International Trade, The University of Adelaide

The distorting effects of state-owned enterprises (SOEs) and industrial subsidies on global market competition has become a topic of increasing importance for many World Trade Organization (WTO) members in recent years. There is growing pressure from key actors for WTO reform. The U.S., EU and Japan have jointly outlined a reform agenda for the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM)1 , focusing on market distorting effects of state capitalism. China has offered a different reform agenda that seeks greater recognition of the role of subsidies in pursuing legitimate social and development goals, as outlined in a recent WTO communication. Subsidy usage is therefore a key development issue.

A lack of reform may lead to growing use of subsidies by developed and advanced developing countries with deep pockets in ways that ultimately widen the economic gap between countries. This is because many developing economies will not have the capacity to leverage subsidies to build their industrial bases.

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How COVID-19 could help eliminate fossil fuel subsidies

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By Mario Pezzini, former Director of the OECD Development Centre and special adviser to the OECD Secretary-General on development, and Håvard Halland, Senior Economist at the OECD Development Centre


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


Oil pumpjacks in Tatarstan, Russia
Photo: Yegor Aleyev/Tass/PA Images

As oil-exporting countries struggle to respond to the crisis, there is a way to make critical fiscal resources available.

The Covid-19 pandemic has hit oil-exporting countries at the worst possible moment. Severely strained health systems, and the need for economic stimulus, call for unprecedented growth in public spending. At the same time, oil export revenues have plummeted, following the demand collapse caused by the pandemic and a breakdown of traditional price-setting mechanisms. As a result, many oil exporters in the low- and middle-income category will struggle to muster anything near the level of expenditure required for an efficient response to the virus. Continue reading