Lawful Remedy or Illegal Response? Resolving the Issue of Foreign Subsidization under WTO Law

Discontentment is growing such that governments, and notably that of China, are increasingly providing subsidies to companies outside their jurisdiction, ‘buying their way’ into other countries’ markets and undermining fair competition therein as they do so. In response, the European Union recently published a proposal to tackle such foreign subsidization in its own market. This article asks whether foreign subsidies can instead be addressed under the existing rules of the World Trade Organization, and, if not, whether those rules allow States to take matters into their own hands and act unilaterally. The authors shed light on these issues and provide preliminary guidance on how to design a response to foreign subsidization which is consistent with international trade law.