世界经济论坛-产业政策与国际竞争：贸易与投资视角（英）-2022.2-30页_28mb

Summary of "Industrial Policy and International Competition: Trade and Investment Perspectives"

Core Content

This white paper explores the evolving role of industrial policy in the global economy, particularly in the context of increased state intervention due to the COVID-19 pandemic, climate change, and economic nationalism. It emphasizes the need for revising international trade and investment rules to address the spillover effects of such policies, ensuring fair competition and transparency across borders.

Main Views

• State intervention has become more common, with governments using a variety of instruments to support domestic industries, including subsidies, state ownership, procurement policies, investment screening, and trade remedies.
• International rules are essential to manage the distortive effects of these interventions, especially as they impact global markets and trade relations.
• Developing and least-developed countries are often left behind due to limited fiscal capacity, inadequate infrastructure, and weak social systems.
• There is a need for a balanced and inclusive dialogue among nations to reform international rules in a way that respects development needs while promoting fair competition.

Key Instruments of Industrial Policy

1.1 Subsidies

• Definition: Financial contributions by governments that benefit individuals and firms.
• Types: Direct payments, tax cuts, price controls, etc.
• Purpose: To correct market failures (e.g., under-supply of goods, positive externalities).
• WTO Rules:
  • Non-agricultural goods: Subsidies that are specific (targeted at industry, region, or firm) are actionable (subject to countervailing duties), while non-specific subsidies are non-actionable.
  • Agricultural goods: Green Box subsidies (less trade-distortive) are allowed, while Amber Box subsidies (trade-distortive) are subject to reduction commitments.
  • Services: Subsidies are still subject to GATS rules, but negotiations have made little progress.
• Challenges:
  • Lack of transparency in subsidy reporting.
  • Difficulty in distinguishing between "good" and "bad" subsidies.
  • Need for updated rules to account for new economic realities and climate objectives.

1.2 State Ownership and Control

• SOEs are increasingly involved in global trade and investment, with significant infrastructure investments and assets in emerging and developing countries.
• SOEs are strategically important, often driven by national interests and geopolitical objectives, even if they face market inefficiencies.
• Corporate governance of SOEs is a concern, with issues in risk management, technology adoption, and managerial efficiency.
• SOEs play a central role in China's Belt and Road Initiative (BRI), with Chinese SOEs handling over 70% of BRI projects by value.

Priorities for Reform

• Revising international rules to better handle level-playing-field concerns and spillover effects of state interventions.
• Establishing criteria for "good" subsidies that are non-actionable and revising the list of prohibited subsidies.
• Updating the OECD Guidelines on investment screening and export credit.
• Including services and agricultural subsidies in the scope of reform discussions.
• Improving transparency and data collection on government interventions to support policy analysis and trade negotiations.

The Way Forward

• International cooperation is critical to address global challenges and ensure fair competition.
• Revising multilateral disciplines to reflect new economic rationales, such as climate change and supply chain security.
• Enhancing communication and coordination between governments to manage the transition from state support to market-driven models.
• Supporting vulnerable communities through social safety nets and flanking mechanisms during the reform process.

Conclusion

The paper calls for a coherent, government-wide approach to industrial policy, emphasizing the need for clarity, transparency, and inclusive dialogue to ensure effective and equitable international trade and investment rules. It also highlights the importance of data and methodologies to support policy decisions and trade negotiations.