With the creation of the WTO, however, the strategic choices available to governments
were limited by regulations on export and domestic production subsidies, making what was once
conceptually desirable as a strategic trade policy now rather impractical. Current literature
emphasizes that there still remains a scope for governments to use R&D subsidies to achieve
both theoretical justifications for strategic trade policy. While this kind of industrial policy as strategic trade policy is therefore theoretically alluring and practically feasible, in reality the benefits of R&D subsidies are likely to accrue to foreign as well as domestic firms. Furthermore, since the rival promotion of national champions can lead to escalating costs and even all-out trade war, I argue that focusing on economic development fundamentals and perhaps
maintaining a spirit of international cooperation remain the most viable strategies.