The international legal framework for industrial policy: World Trade Organization disciplines and rules

Abstract

Industrial policies and international trade law impact one another in several ways. Trade measures are usable across many domains of industrial policy, including tariffs, quantitative restrictions, trade remedies, subsidies, etc. These practices are regulated by the legal framework of the World Trade Organization (WTO). This chapter presents an overview of the WTO framework for industrial policy in order to understand how WTO rules impact Members' policy space in this area, and notably whether they restrain or expand Members' autonomy to adopt industrial policy measures, with a particular focus on the EU's regulatory autonomy. The analysis of the WTO framework is divided into the three pillars of the multilateral trading system: rule-setting, monitoring and judicial mechanisms. The authors find that the WTO rules, by limiting arbitrary measures and preventing and remediating trade conflicts, provide increased clarity for trade and investment policy decisions. Overall, it is concluded that the WTO framework leaves enough policy space for Members in terms of industrial policy, with more or less flexibility depending on the nature of the measures adopted.