Subsidies

From the Economist: The president of France, Nicolas Sarkozy, has made it clear that support for PSA Peugeot-Citroën and Renault will depend on production staying in the country. This is the kind of measure -- in essence, a location incentive -- that feels like it violates WTO rules, but probably

Former AB Member Jim Bacchus looks at the auto bailout and notes: The U.S. is not the only country contemplating auto and other subsidies as a way of confronting the global recession. The Europeans are drafting an auto subsidies plan now. Canada and China are considering assisting their automakers.

This letter to the FT makes a good point: Sir, A colleague wondered whether a Detroit bail-out would run afoul of the World Trade Organisation rules prohibiting government subsidies that grant unfair export/import advantage to domestic manufacturers. A quick Google search revealed that in June 2007 the US Commerce

Most of the recent auto bailout focus has been on subsidies requested by the Big Three.  But there is also the matter of the state tax incentives given to foreign automakers to set up factories there: The United Auto Workers Union boss [Ron Gettelfinger] also hit out at those US

Well, a portion of them, anyway.  From a speech he gave today: We will go through our federal budget -- page by page, line by line -- eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way. Let me give you

It appears that the multi-billion dollar aid package that will likely be given to the U.S. auto industry has not gone unnoticed by our trading partners: "We will look very carefully at the details of the proposed aid package to the U.S. auto industry, in order to

Taxpayers for Common Sense provides details on the pork included in the bailout bill in order to secure its passage, including the following: Sec 502. Provisions related to film and television productionsIn an effort to keep film and television productions in the U.S, they would be eligible for a

The big auto industry loan package I mentioned the other day seems close to passing in Congress: Key members of the U.S. Congress are confident a provision needed to trigger $25 billion in loans to automakers will become law within days ... I haven't seen the full details,

There is lots of talk about bailouts these days, mostly to the financial industry.  Given that there are no subsidies rules for services, we are not likely to see many WTO disputes over this.  However, when the government starts bailing companies out, sometimes it becomes hard to draw the line.