By Toby McIntosh
Most member nations of the World Trade Organization (60 percent) have not supplied information about their government subsidies to businesses, a core transparency obligation of WTO membership.
“Non-transparent subsidization is at the heart of a systemic global trade impasse,” according to María L. Pagán, a Senior Research Fellow at the Hinrich Foundation and former US Ambassador to the World Trade Organization.
Government subsidization, particularly in industrial sectors, is “one of the most serious problems facing many economies today,” Pagán wrote in a Hinrich Foundaton white paper, Why transparency must come first in fixing global trade’s big problem.
The steadily worsening transparency gap is increasingly acknowledged and lamented by WTO leaders and members. And some new enforcement ideas are circulating.
60 Percent Noncompliance Rate
The scale of the problem is evident: 100 of the 166 WTO members have yet to submit their subsidy notifications, according to the minutes of an April 30, 2026, meeting of the WTO Committee on Subsidies and Countervailing Measures (Section 6, page 12). The minutes state:
The Chair observed that as of 30 April 2026, 100 Members had not submitted their new and full subsidy notifications for 2025, despite the deadline being 30 June 2025. Furthermore, 78 Members had failed to submit their 2023 notifications, even though the deadline was more than two years ago. Additionally, 80 Members had yet to submit their 2021 notifications, which had been due more than four years before. Many of these Members either had never notified or had only done so in the distant past.
The minutes lament, “Despite all the efforts and calls, compliance with the obligation to notify subsidies unfortunately remained significantly low and the chronic low compliance with this fundamental transparency obligation constituted a serious problem in the proper functioning of the Agreement.” (Text of WTO committee minutes)
The submission rate is at the lowest level since the WTO was created, according to the minutes, which also state, “This significant decline threatened Members’ ability to resolve issues related to subsidies and increased the prospect of unilateral actions by Members.”
China is one of the countries (all listed in the minutes) that has not submitted it subsidy notification and has a high subsidy level.
The Organisation for Economic Co-operation and Development (OECD) has estimated that around 22 percent of the global market share gains of firms that grew between 2005 and 2023 can be explained by the subsidies they received. For Chinese firms, however, almost 60 percent of their global market share gains can be explained by the subsidies they received, according to a June 2026 OECD report.
The subsidy information is critical, Pagán wrote. She said: “While having accurate information is not sufficient to fix the subsidization problem, it is a necessary pre-condition for grasping the problem and any attempts at trying to find a fix for the WTO specifically and multilateral trade broadly, whether through new disciplines, new remedies, or both. You must have a clear picture of what you are dealing with, before you can negotiate new disciplines.”
Solutions?
Failure to submit subsidy notifications constitutes a breach of members’ obligations under the WTO Agreements, but without penalty. Some proposals have been made to enforce the obligation.
Pagán summarized the suggestions, which would penalize countries for subsidies that have not been disclosed.
The European Union in January proposed that “notified measures should enjoy better treatment than non-notified measures.” And the United States said that “specific disadvantages will likely be agreement-specific and reflect the nature of the measure or practice not notified” and proposed four high-level principles for discussion, including, “Members that experience harm from the non-notified measure or practice should be able to have immediate recourse to protect themselves.”
Pagán called the US principles “positive” while noting that “there is a lot to consider here.” She wrote: “Among other things, what period of time does the delinquent member have to remedy the deficiency? Who determines harm? Who determines whether the response is proportionate?”
