DIW-OECD Industrial Strategy Dialogue

Free, fair, and diversified trade plays a crucial role in the development of new technologies and thus also in the success of industrial and innovation policy strategies. Access to critical raw materials and other inputs, such as semiconductors or steel scrap, is often a prerequisite for the development of new technologies, including in the important areas of digitalization and decarbonization. At the same time, access to international markets is crucial – especially for smaller open economies – in order to achieve economies of scale and thus quickly enhance cost efficiency of new technologies. However, by subsidizing technologies that have not yet reached market maturity, industrial policy can unintentionally distort global competition and fuel ongoing trade disputes. Overall, countries around the world are preparing for a more protectionist global environment. Many are attempting to become less dependent on critical imports by building up domestic industries and promoting a more circular economy. The roundtable will discuss how OECD countries and partners can work together more effectively to better leverage the synergies between successful industrial policy strategies and open global markets, while managing tensions. How can access to critical inputs and markets be improved by establishing and expanding trade partnerships? What ways are there to promote the development of new technologies in a way that distorts international competition as little as possible, and when shift comes to shove how can trade disputes around industrial policies be resolved?

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