Subsidy WatchIssue 32, September 2009


  • The Tough Politics of Energy Subsidy

    By David G. Victor, University of California, San Diego

    Governments spend staggering sums of money subsidizing energy—in particular fossil fuels, but increasingly also other forms of energy such as renewables.  The latest global assessment, published last year by the International Energy Agency, puts the total energy subsidy at far more than US$300 billion annually.  And that figure is surely much smaller than the real total, for it excludes many subsidies that are hard to measure and also omits a large number of countries, notably the highly industrialized nations that provide a wide variety of energy subsidies.  (The United States, alone,

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Also in this issue:

Commentary

  • Transparency as a tool for subsidy reform

    By Terry Collins-Williams and Robert Wolfe

    Transparency, one of the fundamental norms of the trading system, is increasingly seen as an essential tool in the governance of international trade. Recent initiatives to cope with the trade dimensions of the current global economic crisis have focused on transparency mechanisms to increase understanding of and confidence in governments’ responses to threats of economic meltdown.

    This brief examines the nature and use of transparency provisions in the area of subsidies disciplines. 

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News

  • Cash for clunkers poor for the environment and the economy

    Since the outset of the global economic crisis, governments have rescued companies and industries deemed too large or important to fail.

    As public opinion has mounted against these handouts, politicians have looked for ways to help struggling industries without attracting public scorn. Perhaps the most prominent of these efforts are the so-called “cash for clunkers” subsidies which have been implemented in almost a dozen European countries, the United States, China and Mexico.

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  • WTO gives Brazil the green light to retaliate against U.S. cotton subsidies

    A World Trade Organization (WTO) compliance panel has issued its decision authorizing Brazil to retaliate against the United States for failing to abide by previous WTO rulings which determined U.S. subsides to cotton illegal.

    In its ruling, handed down on 31 August 2009, the WTO panel determined that Brazil could retaliate against the U.S. in the amount of US$147.4 million for the fiscal year 2006, and an annual amount for subsequent years, estimated at US$294.7 million based on 2006 data.

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  • Boeing, Airbus “launch aid” disputes: decision in first dispute released to parties, remains confidential

    On 4 September 2009 a WTO panel handed down an interim ruling in the long running dispute between the United States and the European Commission over so called “launch aid” in the form of soft loans to the European aircraft manufacturer Airbus.  

    While the ruling remains confidential, U.S. Senators from states where Boeing has a large presence have been briefed on the decision by the Office of the United States Trade Representative (USTR) and have commented publicly on the outcome.

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  • The U.S. follows Europe’s lead and re-starts milk export subsidies

    Another dispute brewing this summer concerns U.S. export subsidies to milk which were reintroduced in May 2009, following a similar move by the European Union in January. The U.S. and the EU have argued that they will not exceed their WTO commitments on export subsidies; nonetheless, the subsidies have drawn criticism from the Cairns group of agriculture exporting countries.
     

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  • Indonesia poised to increase energy subsidies

    On 3 September 2009, the Jakarta Post newspaper announced the latest development in Indonesia’s long struggle with energy subsidization: spending will increase, again.

    Two decisions seem to have been made in close succession.

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Studies

Events