Green Industrial Policy Conflict with WTO Rules and Implications for Emerging Economics: From the Perspective of New Energy Vehicles (NEVs)

Abstract

Purpose – The purpose of this paper is to analyze the green contradiction between China’s NEVs subsidy policies and WTO rules. It proposes resolutions for China and South Korea from the perspective of GATT Article 20 and the US New Climate Bill. Design/Methodology/Approach – Based on the investigation of NEVs in the market, this paper finds that relevant effective subsidy measures can promote China’s NEVs development. Moreover, through case study and literature, this paper also analyzes the compliance of China’s NEVs subsidy measures under the SCM Agreement. Finally, it puts forward relevant implications for the NEVs development of China and South Korea. Findings – This paper studies credit preference, financing support and LCRs, which may be determined to be prohibited subsidies and production subsidies, Tax incentives and price support may be determined to be actionable subsidies. Subsidies for specific NEV enterprises or regions may be deemed to de jure or de facto specific subsidies with disordering global trade order. Research Implications – This study has far-reaching significance in promoting the reform of WTO related- subsidy regulations and formulating a special RE subsidy agreement under the multilateral trade system, which will resolve the conflicts of the environmental and energy trade under the background of low-carbon energy transition.