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Abstract

The international market has recently faced significant disruptions owing to major geo-political events such as the Covid-19 Pandemic and the Russia-Ukraine War, resulting in unreliable and erratic global supply chains. In a bid to create and secure more sustainable supply networks, countries have adopted ‘friend-shoring’ policies, encouraging their enterprises to source supplies from friendly or allied nations. While the primary objective of these policies is to stabilize global supply chains, these initiatives also stem from a desire to reduce reliance on countries that pose a threat to the geopolitical order.

Although tailored as a market-based strategy, these friend- shoring policies, grounded in nation-based preferences,

represent a retreat from globalisation and pose potential risks to global trade and investment flows. Against this background, the article examines the US Inflation Reduction Act (IRA) of 2022, a key Biden administration initiative, introduced in furtherance of the goal of achieving net-zero emissions by 2050. The IRA, by imposing discriminatory requirements and favouring countries with free trade agreements with the US, positions the US as the primary beneficiary. This has triggered a ripple effect, where other countries have adopted similar discriminatory protectionist measures, exacerbating the threat to global trade and undermining WTO Rules. While the article acknowledges the IRA’s historic commitment to building a clean energy economy, it argues that its discriminatory features are driven by national security and geo-political considerations rather than traditional policy objectives, posing a serious challenge to the integrity of the international economic law system.

Digital Object Identifier (DOI)

10.55496/LFKV8811

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