Industrial Policy and International Competition: Trade and Investment Perspectives

The report examines how governments use subsidies, state-owned enterprises (SOEs), procurement policies, investment screening, and trade remedies to achieve national economic and environmental goals. It argues that existing WTO and international rules are outdated and fail to address modern economic realities, such as the rise of state capitalism and the need for green transitions. The document calls for a balanced update to these rules to ensure a level playing field while allowing for legitimate public policy objectives, particularly in the wake of the COVID-19 pandemic and the climate crisis.

• There has been a significant global shift toward economic nationalism and protectionism, with the Global Trade Alert reporting over 32,500 protectionist policy interventions since November 2008, compared to only 6,900 trade-liberalizing ones.
• Energy subsidies are exceptionally high and counterproductive to environmental goals; in 2015, global energy subsidies were estimated at $5.3 trillion, or 6.5% of global GDP, with China accounting for $2.3 trillion.
• State-owned enterprises (SOEs) have a massive global footprint, holding assets worth $45 trillion—approximately half of global GDP—and accounting for 55% of infrastructure investments in emerging and developing countries.
• The World Trade Organization (WTO) faces a chronic lack of transparency regarding subsidies, as the number of members failing to make required notifications under the SCM Agreement has risen sharply as membership grew.
• Agricultural subsidies in developed regions distort global markets; the OECD estimates an annual average of $536 billion in direct support to farmers across 54 countries, which reduces the income of farmers in developing nations.
• Investment screening has intensified on national security grounds, with 31 governments reforming policies to protect critical technologies and infrastructure, including the US through CFIUS and the EU via its 2020 FDI Screening Regulation.
• Trade remedy actions, particularly anti-dumping (AD) investigations, surged in 2020 with 279 cases initiated by G20 members, a 60% increase over 2019, primarily targeting metal and steel products.
• The EU has introduced a 'transnational subsidies' approach, applying countervailing duties to imports from Egypt that were subsidized by the Chinese government, creating legal uncertainty regarding WTO rules.

APA

World Economic Forum (2022). Industrial Policy and International Competition: Trade and Investment Perspectives. https://www3.weforum.org/docs/WEF_Industrial_Policy_and_International_Competition_2022.pdf

Chicago

World Economic Forum. Industrial Policy and International Competition: Trade and Investment Perspectives. 2022. https://www3.weforum.org/docs/WEF_Industrial_Policy_and_International_Competition_2022.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Industrial Policy and International Competition: Trade and Investment Perspectives |date=February 2022 |url=https://www3.weforum.org/docs/WEF_Industrial_Policy_and_International_Competition_2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2022industrial, author = {{World Economic Forum}}, title = {{Industrial Policy and International Competition: Trade and Investment Perspectives}}, institution = {World Economic Forum}, year = {2022}, month = feb, url = {https://www3.weforum.org/docs/WEF_Industrial_Policy_and_International_Competition_2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }