The recent geopolitical climate arising from the Russia-Ukraine conflict, tensions in West Asia, rising trade protectionism and increasing geo-economic fragmentation is contributing to high trade and logistics costs and disrupting global supply chains. In this evolving environment, reducing trade costs and improving supply chain resilience have become key policy priorities for enhancing trade competitiveness.

Abstract: The renewed prominence of industrial policy in the context of digital transformation, climate transition, and rising geoeconomic competition has revived debates on the role of state intervention within multilateral trade rules. The paper analyses recent WTO reform proposals, particularly those related to subsidy rules under the Agreement on Subsidies and Countervailing Measures (ASCM), several of which have been promoted by advanced economies including the United States and the European Union.

Industrial policy has evolved from being viewed as market-distorting intervention to re-emerging as a central instrument of economic strategy. Major economies are actively deploying subsidies, local content requirements, supply-chain controls, and state-backed financing to secure strategic sectors ranging from semiconductors to clean energy. At the same time, discussions on reforming the World Trade Organization (WTO) are intensifying.