WTO commitments on export promotion

Abstract

The purpose of this study is to review the main commitments undertaken in the framework of the World Trade Organization (WTO) on the issue of subsidies and the policy implications of such agreement. The freedom of action that is left to developing countries to promote exports is also examined. The conclusion reached is that, while the use of old style subsidies is restricted, there is still manoeuvring room to apply them creatively as well as to think forward to devise alternative policy initiatives. These policy options are thus discussed and some basic criteria for their formulation and implementation are suggested. Finally, it is argued that there are more benefits than costs in the new commitments insofar as subsidies are less useful in today's trading environment. New policy options will entail considerable social and institutional "re-engineering".