Bailout Watch 182: EU: You'll Be Hearing From Our Lawyers
Quick, what do egregious bailouts have in common with the invasion of Iraq? Sticklers for a little-known concept called “international law” aren’t fans of either. And this time they could actually sue. “We will look very carefully at the details of the proposed aid package to the U.S. auto industry, in order to ensure compliance with international trade rules and assess the potential impact which it may have on trading partners,” Peter Power, trade spokesman for the European Commission told CNN yesterday. The World Trade Organization prohibits a range of subsidies that unfairly hurt competitors, and with pro-bailout rhetoric hitting new heights in “whatever it takes” shrillness, there’s a chance that good intentions will translate into a WTO lawsuit. After all, Europe and the US are already beefing over a number of trade issues, from aerospace subsidies to agriculture. In fact, it’s possible that Bush’s resistance to bailout plans is a result of his humiliating retreat from steel-industry protectionism some five years ago. Then, as now, a struggling industry needed his help, and help he did. Until the EU threatened $2.2b in retaliatory economic sanctions. Sue me once, shame on you…
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I will concede a little hyperbole on the "most U.S. hating" bit, but please allow a little poetic license. European anitpathy towards the U.S. is widely recognized. Any I would not consider the Mitterrand years as extreme as Chirac's in that regard. But anyway, my main point was, and remains, that it is simply laughable, nay absurd, for Europe to threaten or lecture the U.S. as regards industrial subsidies of any shape or size. From agriculture to airplanes, they're ready to throw gov't Euros at anything to gain an edge. Airbus was created and backed by European gov'ts for the sole purpose of burying Boeing. For the B&B to sit back and say, "well you know those free-enterprise-loving Europeans got a good point there" is something I cannot let pass without comment.
"Yes, but will the current outgoing president and treasury secretary care about the long-term ramifications? I think not." Hmmm, I could have sworn that it was Obama who was wholeheartedly supporting the D3 bailout whereas Bush was opposed in principle (or at least wants the Colombia FTA in return).
I've got some advice for the highly hypocritical EU. Unfortunately, this is somewhat of a family site. Do they have a blind eye toward Asia?
Speaking from the perspective of a small country, I'd say there's more than enough disingenuousness on the part of both the EU and the USA when it comes to subsidies and pious utterances on free trade. The Americans feel they never subsidized anything in their life, and that we Canadians unfairly subsidize lumber exports to the US. They take us to the WTO, and lose everytime. We haven't got our overpayments of US duty back yet though. The Europeans like to think they're highminded and are the repository of all advanced social thinking, and so keep out Canadian exports because our Inuit kill seals, etc. The US buys overpriced military jets, as a way of subsidizing Boeing. The EU keeps Airbus running, well, just 'cuz. Puffery on both counts. I'm sure both the US and the EU have never done anything wrong themselves, beyond the usual over the top agricultural subsidies. Why no, never. I'm looking forward to a WTO fight between the pair, in no small part to see what convoluted, ridiculous arguments both sides' lawyers will dream up to advance arguments. The WTO was dreamed up to make sure the little countries are always at a disadvantage of the big 'uns. Basically a case of "don't do as we do, do as we say". I say, if you don't follow the rules baked into international agreements, may as well give 'em all up, and slap tariffs on everything, just like the old days. That'll solve things. It's like this financial G20 summit in Washington. Bush, in all his elemental glory, is insisting that there's no need for world financial regulatory reform. Why it's just fine. Our idiotic prime minister Harper is toeing the US line. I mean, if there's nothing wrong with regulatory policy, why are we in this f*****g mess? Meanwhile in Canada, we have different stock market regulators for each province, which in this day and age is bullshit. So Harper's one to talk. Right now, everyone's in the "it's all your fault mode", and the "let me adjust my blinkers so I can studiously avoid giving any credence to your argument mode." BS from start to finish. Just a lot of flailing about.