Governments worldwide are increasingly deploying subsidies to secure supplies of vital materials and components, reduce greenhouse gas emissions, or promote advanced technology. Some of these programs can distort trade and confer an advantage on domestic producers over foreign competitors. The World Bank, in partnership with other international organizations, is collecting data and conducting analysis on the extent, types, and objectives of government subsidies as well as their effects on trade. The purpose is to advance international dialogue on how the global, rules-based trading system can best respond.
The study "Unfair Advantage: Distortive Subsidies and Their Effects on Global Trade" by the World Bank (2023) builds an inventory of subsidy measures across major trading partners collected uniformly. It lays the groundwork for a new analytical framework to estimate the trade-distortive effects of subsidies across countries and sectors and assesses the international regulatory environment on the use of subsidies, identifying important gaps.
Accompanying this study is a dataset summarizing subsidies identified for World Bank (2023). Coverage includes 31 jurisdictions spanning over 50 countries including EU members that account for over 70 percent of global goods trade. The data track subsidy programs in place in 2018, identifying the type of subsidy, stated objective, and industrial classification among other variables.
Additionally, there is a Green Subsidies Database that identifies subsidy measures with environmental objectives such as preserving natural resources or encouraging cleaner energy sources.
A joint report titled "Subsidies, Trade, and International Cooperation," prepared by staff from the IMF, OECD, World Bank, and WTO in 2022 amid tensions over the use of subsidies and their possible trade and economic effects across trading partners aims to lay out a common background on the subject. It calls for multilateral action and cooperation while identifying some priority areas for reform.
The Subsidy Platform is a joint effort by staffs from the IMF, OECD, World Bank Group, and WTO. Its purpose is to increase transparency on the use of subsidies across economies and sectors and serve as a one-stop shop for information and analysis maintained by these organizations.
Blogs accompanying this research highlight several points:
- A blog describes a new dataset showing that government subsidies for green technologies like electric vehicles and solar panels are increasing. China, the US, Australia, Canada, and the EU are leading this trend.
- Another blog argues that developing countries are most vulnerable to trade-distorting effects because they rely heavily on trade to drive economic growth.
- Charts show that while most subsidies are not directly related to trade; their effects can be more distortive than tariff barriers. The world's biggest economies—China, the European Union (EU), and United States—account for about 75 percent of documented programs focusing heavily on industry.