Old Rules in a New Era: The WTO and the Resurgence of Industrial Policy through the Lens of the SCM Agreement

The global economy is undergoing a major transformation marked by a rise of state economic interventionism, reflected especially in the return of industrial policy. The article examines how this resurgence intersects with the existing multilateral trade framework, namely the WTO’s Agreement on Subsidies and Countervailing Measures (SCM). Drawing on an analysis of a database of all WTO disputes invoking the SCM Agreement, the article shows that the regime has historically been relatively permissive. The new industrial policy, while seemingly at odds with the ethos of liberal globalization, operates largely within the latent flexibilities of the WTO framework rather than in open defiance of it. The SCM Agreement’s limited scope and enforcement capacity may serve as an example of a new modus operandi for the organization in the context of increasing state interventionism, enabling a form of coexistence between multilateral trade rules and a more active use of industrial policy.