New US Domestic Content Requirement for COVID-19 State Aids
Steve Charnovitz
While I was pleased to see the G20 Statement on 30 March 2020 that governments should avoid "unnecessary interference with international traffic and trade," I also note that the Statement does not mention the word "law," as in "international law" or "WTO law." So, I was disappointed, but not surprised, that the Trump Administration added a domestic content requirement to the $350 billion U.S. "Paycheck Protection Program" to provide subsidies to US businesses. In order to obtain the financial contribution, the applying business executive has to certify that "To the extent feasible, I will purchase only American-made equipment and products." The recipient is also required to agree that "if the funds are used for unauthorized purposes, the federal government may pursue criminal fraud charges."
This may be the largest WTO-illegal subsidy in the history of international trade law.
A disaster provides opportunity, and the COVID-19 disaster is giving the United States yet another opportunity to engage in discrimination and protectionism in international trade.