Most countries broadly aspire to free trade, and the benefits of international trade at times induce situations where governments support domestic industries with the objective of encouraging exports or to better enable them to compete with imports, to help develop national industries of strategic importance, to encourage economies of scale, for purposes of national prestige, or a host of other reasons. Since this could put countries in conflict with the broader WTO objectives of free and fair trade, WTO disciplines the ability of member states to set domestic policies in any unrestrained manner. Where government policies (or the conduct by individual businesses and industries) breach the agreed WTO rules, possible deviations from the WTO principles of non-discrimination, and related rights to remedial action, come into play.

This Trade Brief looks at a recent example of a long-standing international trade dispute and links the consequences that can result with potential impacts and opportunities for business not only in the countries directly involved, but also in third countries. It is prudent for business to monitor such developments and associated business risk and opportunity closely.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.