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Practical First Steps Towards Comprehensive Subsidy Reform

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Practical First Steps Towards Comprehensive Subsidy Reform

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Ash, K., Cox, A., & Draper, P. (2024, May 29). Practical First Steps Towards Comprehensive Subsidy Reform. TESS. Retrieved June 3, 2024, from

In this article, the authors, including Anthony Cox of Ecologic Institute, highlight there is little appetite among WTO members for modernizing multilateral subsidy rules at a time when many countries are introducing new forms of support that could potentially exacerbate existing policy disincentives for globally sustainable economic and environmental outcomes. In order to kickstart much needed reform, the article highlights the need to take a comprehensive approach to analysis of actual impacts of government support, looking across fossil fuels, agriculture, fisheries, industrials, and advanced technologies. It suggests that demonstrably bad subsidies that distort production, investment, and trade decisions, discriminate across potential beneficiaries, or harm the environment be removed in favour of good subsidies and other forms of government support that address market failures and promote competition and innovation.

The authors argue that relevant international organizations should be requested to work together to distinguish much more clearly between good subsidies and bad subsidies. The IMF, OECD, WBG, and WTO are well-positioned to generate a robust analytical base to support reforms and promote a more sustainable economic and environmental future. The authors recognize that while such reform is challenging, robust analysis of the opportunity costs of existing support is a vital first step towards multilateral action, preferably at the WTO.

Urgent need for multilateral subsidy reform


Ken Ash (Institute for International Trade)
Peter Draper (Institute for International Trade and Jean Monnet Centre of Excellence in Trade and Environment)
Published in
From Vision to Action on Trade and Sustainability at the WTO, A Synergies series, curated by TESS
Published by
subsidy reform, environmental damage, economic damage, OECD, IMF, World Bank, sustainable future, international organizations, climate policy, fossil fuels, agriculture, aluminum sector, greenhouse gas emissions, GHG, international cooperation, political decisions, sustainable support measures
data analysis, subsidy evaluation, economic analysis