IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

WTO Subsidies Discipline During and after the Crisis

  • Gary N. Horlick
  • Peggy A. Clarke
Registered author(s):

    This article reviews the successes of the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures (the strengthened discipline on export subsidies), and the failures (the lack of discipline on domestic subsidies) from the birth of the WTO in 1995 to the onset of the financial crisis in 2007--09. During the crisis, governments poured money into economically necessary or politically deserving industries. The prohibition on export subsidies held up fairly well during the crisis, but the prohibition on import-substitution subsidies was likely flouted by understandings that bail-outs of industrial companies would lead to use of local supply chains. Trillions of dollars were poured into service sectors, notably financial services and real estate, and there are no WTO rules for services subsidies, notwithstanding commitments to negotiate them in the General Agreement on Trade in Services. Most likely, if there had been any rules disciplining subsidies in the financial services sectors, they would have been ignored, as the disciplines on domestic subsidies for goods were often ignored during the crisis, and before it. The crisis threw into clearer relief the question of why governments agreed to rules in 1994 which they found too uncomfortable to obey, or to enforce against other governments. The Agreement on Subsidies and Countervailing Measures sets up rules which are not strict enough to eliminate the use of countervailing duties as protectionism, and disciplines on subsidies that are too loose to prevent politicians from over-subsidizing. The authors conclude with some thoughts on the future of subsidies disciplines within the WTO. Oxford University Press 2010, all rights reserved, Oxford University Press.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://hdl.handle.net/10.1093/jiel/jgq043
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Oxford University Press in its journal Journal of International Economic Law.

    Volume (Year): 13 (2010)
    Issue (Month): 3 (September)
    Pages: 859-874

    as
    in new window

    Handle: RePEc:oup:jieclw:v:13:y:2010:i:3:p:859-874
    Contact details of provider: Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
    Fax: 01865 267 985
    Web page: http://www.jiel.oupjournals.org/
    Email:

    Order Information: Web: http://www.oup.co.uk/journals

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:oup:jieclw:v:13:y:2010:i:3:p:859-874. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.