The COVID-19 Exogenous Shock and the Crafting of New Multilateral Trade Rules on Subsidies and State Enterprises in the Post-Pandemic World

This Article discusses existing WTO rules on subsidies and state enterprises, relevant caselaw and reform prospects in light of key geopolitical developments and changes in the global economy emerging in the aftermath of the Covid-19 pandemic. Following a general introduction, the Article critically analyzes present WTO rules on industrial subsidies, focusing inter alia on the new problems raised by activist industrial policies pursued by global trading powers, foreign subsidization, the climate change shock and environmental exigencies. It then shifts attention to the application of WTO rules on subsidies to the state sector and the increasing demands for new international trade rules on non-subsidies measures to address the negative spillover effects on trade from government influence on state-owned enterprises (SOEs). With respect to each of these matters, the Article first clarifies the terms of the problem in relation to existing WTO rules and caselaw, and next examines the question of how, and to what extent, “deeper” free trade agreements (FTAs)—those that experts designate as models for WTO reforms on the matter—establish new rules that permit to adequately address the trade concerns raised by SOEs’ commercial and financial activities. Based on this multi-layered analysis, the article concludes by examining prospects of reform of WTO rules on state interventionism.