Preserving Open Trade: Subsidies, Geopolitics, and International Cooperation | Highlights from the WBG-IMF Spring Meetings 2022

Trade can be an effective catalyst for growth and development. However, the growing use of market-distorting subsidies undermines the multi-lateral, rules-based trading system that has promoted trade liberalization and global growth in the past. At a time when the global economy is coping with multiple shocks, including the pandemic, the Russian invasion of Ukraine and supply chain disruptions to food and other goods, governments are increasingly turning to subsidies for relief. But the costs can be very high, in terms of public spending and distorted incentives for investment and consumption. How can international cooperation help create a fairer trading system for countries at all income levels?

During the 2022 World Bank Group-IMF Spring Meetings, the heads of the four key global economic policy institutions—the World Bank Group, the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO)—discussed the importance of trade and global cooperation for overcoming current challenges and implications of subsidies for markets and poor countries. They called for more transparency and proactive measures to reduce their harm, especially for the largest and most distortive subsidies. Listen to the Spring Meetings highlights in a special series of The Development Podcast.

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Timestamps

[00:00] Welcome and introduction of the topic

[02:54] Subsidies, trade, and international cooperation

[06:19] National self-interest vs. globalization

[08:34] The end of an era of globalization?

[11:28] Measurement of agricultural subsidies

[13:40] Subsidy and economic policy in a crisis mode

[18:03] Tackling subsidies: Politically expedient vs sensible things

[24:42] Transparency, access to information, collaboration

[26:34] Closure and thanks for tuning!

Featured voices

• David R. Malpass, President of the World Bank Group: "We need to find a way to have trade that occurs in an efficient way to get the gains for the people around the world. It's going to help the poorest people the most."
• Kristalina Georgieva, Managing Director, International Monetary Fund: "I worry most about multiple shocks simultaneously hitting us and our proven, inability to deal with more than one crisis at one time."
• Ngozi Okonjo-Iweala, Director General, World Trade Organization: "This globalization, this multilateral trading system that has been built, it's a global public good. It took time to build it. And it has lifted more than a billion people out of poverty."
• Mathias Cormann, Secretary-General, Organisation for Economic Co-operation and Development: "It is about having a level playing field, making sure that resources are allocated to where they can have the most beneficial economic impact for everyone and subsidies really distorted that greatly."

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ABOUT THE WBG-IMF SPRING MEETINGS 2022

Preparing for future crises and strengthening international cooperation are essential to deliver a resilient recovery and a better future for those most in need. At these Spring Meetings, the World Bank Group convened leaders, experts and activists to discuss the impact of these global shocks on the most vulnerable communities.

ABOUT THE WORLD BANK GROUP

The World Bank Group is one of the world’s largest sources of funding and knowledge for low-income countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.