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Minnesota Journal of International Law (vol. 28:2 to present)

Abstract

In recent years, the world’s major economies, such as the United States, China, and the European Union, have adopted policies that aim to promote domestic industries in strategic areas, such as semiconductors and electric vehicles, through substantial subsidization. These policies have been justified for the need to secure supply chains and protect national security interests, but they are also incompatible with the rules of international trade law, such as the WTO Subsidies and Countervailing Measures Agreement. There are considerable challenges to addressing this incompatibility as these economies have shared interests in promoting these policies for their own domestic industries. The increasing economic and political tensions between China and other powers, such as the United States, generate substantial political support for maintaining the current trajectory, which is justified by national security concerns, regardless of their incompatibility with WTO law. The current U.S. block of the appointment of Appellate Body members also creates an additional barrier to addressing this issue in the WTO dispute settlement body. This article discusses the revival of industrial policy and examines its implications for international trade law, including incompatibility with the WTO subsidies regime and regulation under GATT Article XXI. The article also explores pathways to bridge the present gap between the requirements of international trade law and industrial policies.

Volume

34

Issue

2

Page Number

237

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