Recent years have seen a proliferation of Special Economic Zones (SEZs) in developed and developing countries. Developed in Europe in its modern shape, most SEZs are located outside the continent today, notably in the developing world, where SEZs form part of these countries’ export-oriented growth policy tools and overall economic development. At a period of growing unilateralism and the return of the State as an economic actor, this contribution seeks to tackle the rise of SEZ laws in the global south, with a particular focus on Africa. It will scrutinize the reasons for their establishment, the measures chosen to promote them, and the international ramifications in these respective regions and broadly on the global plane, notably at the WTO. With the entry into force of the African Continental Free Trade Area (AfCFTA) Agreement, African countries face challenges of multi-layered SEZ governance, which this contribution intends to address. These challenges also extend to the cross-regional trade agreements these countries conclude, individually and as a bloc. Since SEZs are often assimilated with a category of subsidies and are discriminatory trade measures, this contribution, in essence, investigates the extent to which current trade rules at multilateral and regional levels address these controversial aspects of SEZs.

The international economic order is undergoing significant change. Most recently, key countries have been seeking to increase their level of economic security, including through increased industrial subsidies. Regulating subsidies is controversial, but undisciplined subsidy payments could be harmful for the healthy functioning of markets and balanced development among nations. In this regard, the GATT-WTO has regulated subsidies, but it has not been fully functional in recent years, and reform efforts do not appear to be bearing fruit soon. Therefore, in parallel with WTO reform efforts, reliance on other approaches, such as discipline through free trade agreements (FTAs), should be considered. Disciplining subsidies through FTAs is inherently difficult, given the cross-border nature of subsidies on the one hand and the geographical limitations of the FTA’s scope of application on the other. In recent years, however, such disciplines in FTAs have begun to appear, starting with EU FTAs. Thus, this article explores the possibilities and limitations of the discipline of subsidies through FTAs, using Japan’s FTAs as a case study, to approach the path to international control of subsidies. Accordingly, this article first reviews the range of related issues and developments, including characteristics of subsidies, the rationale for subsidy discipline in trade agreements, recent challenges to multilateral subsidy discipline, the current status of subsidy discipline through FTAs, and the background of subsidy discipline in EU FTAs. The article then identifies the WTO-plus elements that are distinct to subsidy disciplines in EU FTAs and discusses their implications. Through these, it highlights the perspectives needed when considering subsidy discipline through FTAs, examines Japan’s FTAs in light of these perspectives, and presents the findings and implications thereof. Considerations are given to Japan’s FTA/trade policy as a background for its subsidy discipline through FTAs, the current status and characteristics of subsidy disciplines in Japan’s FTAs, the Agreement Between the European Union and Japan for an Economic Partnership’s (JPN-EU) subsidy-related provisions as drastic change, the effects on the Asia-Pacific region, and future prospects.

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.

This Article critically analyzes seven elements of the Biden administration trade policy: (1) buy American; (2) tariffs; (3) World Trade Organization; (4) free trade agreements; (5) China; (6) technology; and (7) Russia. Although President Biden has made a clean break from Trump policies in many areas, this is not the case when it comes to international trade. Regretfully, Biden has chosen to keep in place most of the failed trade policies of his predecessor—the Trump tariffs and the China trade war. It is not too late to shift ground, to negotiate mutual abolition of the Trump tariffs, to open free trade negotiations with the EU and UK, to join the Comprehensive and Progressive Trans-Pacific Partnership, to adopt a multilateral strategy with allies to check Chinese trade excesses, and to reengage with the World Trade Organization. Topping the list of needed reforms of the multilateral trading system are: (1) subsidies; (2) state-owned enterprises; and (3) forced technology transfer. These are best addressed through a WTO plurilateral agreement and/or preferential trade agreements. The Biden administration should prioritize these urgent reforms. Rather than promoting “free” trade and multilateral trade reforms, the Biden administration continues its predecessor’s nationalistic policies so that trade serves domestic political ends. Such state intervention in trade policy consists of the strategic use of tariffs, subsidies, “buy American” rules, and regional trade arrangements without regard to the rules of the multilateral trading system. These new policies represent a decisive retreat from globalization and openness to trade.

The Congress, directed by the Biden administration, has adopted a far-reaching industrial policy in the form of four laws that subsidize key sectors of the U.S. economy: American Rescue Plan Act ($40 billion); Infrastructure and Jobs Act ($1.2 trillion); Inflation Reduction Act ($369 billion); and Chips Act ($252.7 billion). This subsidization coupled with “buy American” protectionism constitute a departure from the free trade ideal that has characterized U.S. policy since the end of World War II.

Domestic Investment Laws (DILs), a prominent tool of contemporary unilateral International Economic Law (IEL) in the context of the Liberal International Order (LIO), consistently provide for investment incentives as a key aspect of domestic industrial policies geared to influence investment location decisions. The various types of investment incentives include fiscal measures to attract investment, direct subsidies, and other regulatory measures aimed at creating favorable administrative and regulatory conditions for investment. This article analyzes how the provisions of the World Trade Organization (WTO) Agreements contain basic disciplines and set limitations for the distortive effects of investment incentives. It is argued that the relevance of WTO law for domestic investment incentives should not be under-stated; rather, DILs providing investment incentives should be treated as a limited exception to the ongoing move from international to domestic in the era of the LIO.

Pig (Sus scrofa) production in Hungary provides a case study in how external pressures influence animal production, animal welfare and intensification. External pressures were explored in 24 in-depth, semi-structured interviews with Hungarian pig farmers operating either confinement or alternative systems. Confinement producers reported intense economic pressure because of a power imbalance with the large meat-processing companies that buy their animals. These companies, in the view of the farmers, can source internationally and largely dictate prices. When prices paid by the companies fall below the cost of production, farmers cannot respond by reducing production because of the long time-lags between breeding and marketing; and with their large investment in confinement buildings that are difficult to modify, farmers see little option except to reduce production costs further. Alternative farmers reported being more resilient to economic pressures because they sell into niche markets, use inexpensive technologies, and typically produce a diversity of agricultural products which buffer periods of low profit in any one commodity. The current regulatory system was seen as inadequate to protect animal welfare from economic pressure because it focuses on certain inputs rather than welfare outcomes, does not cover some important determinants of animal welfare, and does not accommodate certain realities of farming. Current subsidies were also seen as an inadequate remedy, and were viewed as inequitable because they are difficult for alternative producers to access. Consumer-choice options, while used by alternative producers, are not available in mainstream markets which demand uniform ‘commodity’ production. The economic constraints that influence animal welfare might be better mitigated by a regulatory system developed with greater consultation with producers, a more equitable subsidy programme, and more developed consumer-choice programmes.

We utilize a unique primary data set of farms in Russia and Kazakhstan to investigate the link between policy reforms and technical efficiency. These countries have heavily subsidized their domestic agricultural production over the last decade, with a total of around USD 76 billion USD and USD 11.5 billion USD in government funding directed towards the agricultural sectors in Russia and Kazakhstan, respectively. Results of a stochastic frontier analysis make evident that variable inputs, such as fertilizer, have a relatively large influence on wheat production compared to land. Nearly every fifth farm has a technical efficiency level lower than 60%, suggesting significant unrealized production potential. While our analysis shows a negative relation between subsidies and efficiency, other factors, such as farmer’s education, cooperative and agroholding membership, and participation in insurance programs, are positively related to farm efficiency. The results imply that the governments and policymakers could mobilize the unutilized wheat production potential by improving the farmer education system, fostering cooperation among farms, and developing functioning farm insurance schemes.

Decades of negotiation to extend the GATT/WTO system to address subsidies have never produced the sort of uniform, scheduled rules that apply to tariffs or even services. Instead, WTO members have developed rules to demarcate permissible and impermissible subsidies. In this paper, I argue that the WTO approach is now hampered by shifts in the share of global trade away from geopolitically aligned, wealthy states and the growth of global supply chains. These pressures were magnified by the accession of China, with its centrality to global trade and recurrent geopolitical tensions with the United States. The challenges in facing cooperation over subsidies suggest limits to the ability for a ‘rules based’ approach to handle substantial changes in the global trading system.

This article offers one of the first comprehensive analyses of China’s emerging practice in subsidizing the low carbon energy (LCE) transition by using the new energy vehicles (NEVs) industry as a case study. It puts forward a fresh framework for this analysis by dividing the NEV value chain into three segments: upstream, midstream, and downstream. Based on this framework, it expounds a strategic shift of China’s subsidization strategy across the NEV value chain, that is, from disproportionately subsidizing the midstream segment that produces NEVs and parts to increasingly subsidizing the upstream and downstream segments to promote research and development (R&D) and expansion of NEV infrastructure and consumption throughout the economy. It argues that this shift mainly comes out of the evolution of China’s industrial policies and economic priorities, which will continue to play a decisive role in the future restructuring and transformation of the NEVs sector. This shift may also reflect China’s intention to reduce potential trade conflicts and maximize WTO-compliance but only to the extent that doing so would not unduly constrain its capacity to pursue its economic goals and industrial policies. In addition, while the WTO rules and jurisprudence may accommodate some of these subsidies (e.g., NEV infrastructure subsidies), the relevant rules will need to be further developed to provide more policy space for other types of subsidies used worldwide (e.g., R&D subsidies). Until then, it remains debatable as to whether the WTO provides sufficient room for countries to facilitate a green recovery in the post-pandemic era.