{While the US seeks a WTO ban on certain types of industrial subsidies, there exists within its own borders an entrenched culture of corporate-welfare provision.}
The United States in June brazenly proposed to expand the list of subsidies prohibited under the WTO’s Agreement on Subsidies and Countervailing Measures.
Many developing countries reacted angrily, Firstly, they complained, the US sought to deprive developing nations of many of the toolsit used to facilitate its own industrialization.Secondly, the US did not propose to eliminate the heavy agricultural subsidies on which it still relies.
These objections to the US proposal were meritorious, but they overlooked the ongoing pervasiveness of subsidization in the US economy, including some fo the very practices the US seeks to prohibit through the WTO–but which it certainly does not intend to abandon for its own economy.
The US proposal would prohibit government payments or loans to, or investments in, failing companies. Over the last several decades, however, the US has frequently undertaken such measures for industries or companies in distress.
Most notably, to the wake of 9/11, the US Congress approved $15 billion in cash and loans to 55 airline companies, prime among them American, Delta and United Airlines. This consisted of $5 billion of aid and $10 billion in guaranteed loans. The Air Transportation Stablization Board was created to issue these loans.After its bankruptcy and subsequent bailout, US Airways demanded that the Pension Benefit Guarantee Corporation (PBGC), a government run corporation, help pay the pensions of its workers.The matter remains unresolved.
This was not a unique case.Since 1970, the US government has bailed out numerous firms.
Double standards
More generally, the US may fairly be accused of double standards at the WTO for urging a prohibition on certain categories of give aways, subidies of different kinds within its own borders.
To highlight just a few example–
• The 1872 Mining Act allows companies to buy federal landat the giveaway price of $5 on acre for mining purposes and does not require any royalties on the profits obtained from extracting these minerals. Thanks to the 1872 Mining Act, the government–and the tax payers–are being robbed of billions of dollars of wealth that is extracted from land that is legally theirs.
Another example–
• The US provides hundreds of millions of dollars in loans and loan guarantees to exporters and US firms investing overseas through the Export-Import Bank and the Overseas Private Investment Corporation. These benefits are typically conferred on health companies, but they provide massive subsidies by instituting the US government as an enforce for overseas partners financial obligations.
There has evolved in IV Washington, DC aculture of corporate-welfare provisions or found as to make almost unimaginable US demands that other countries eliminate industrial subsidies.
It is true that whileWashington has a long history of bailing out companies in distress, the vast majority of US corporate welfare goes to companies that are in fine financial shape. But doesn’t this make such subsidies less rather than more defensible ?
The United States in June brazenly proposed to expand the list of subsidies prohibited under the WTO’s Agreement on Subsidies and Countervailing Measures.
Many developing countries reacted angrily, Firstly, they complained, the US sought to deprive developing nations of many of the toolsit used to facilitate its own industrialization.Secondly, the US did not propose to eliminate the heavy agricultural subsidies on which it still relies.
These objections to the US proposal were meritorious, but they overlooked the ongoing pervasiveness of subsidization in the US economy, including some fo the very practices the US seeks to prohibit through the WTO–but which it certainly does not intend to abandon for its own economy.
The US proposal would prohibit government payments or loans to, or investments in, failing companies. Over the last several decades, however, the US has frequently undertaken such measures for industries or companies in distress.
Most notably, to the wake of 9/11, the US Congress approved $15 billion in cash and loans to 55 airline companies, prime among them American, Delta and United Airlines. This consisted of $5 billion of aid and $10 billion in guaranteed loans. The Air Transportation Stablization Board was created to issue these loans.After its bankruptcy and subsequent bailout, US Airways demanded that the Pension Benefit Guarantee Corporation (PBGC), a government run corporation, help pay the pensions of its workers.The matter remains unresolved.
This was not a unique case.Since 1970, the US government has bailed out numerous firms.
Double standards
More generally, the US may fairly be accused of double standards at the WTO for urging a prohibition on certain categories of give aways, subidies of different kinds within its own borders.
To highlight just a few example–
• The 1872 Mining Act allows companies to buy federal landat the giveaway price of $5 on acre for mining purposes and does not require any royalties on the profits obtained from extracting these minerals. Thanks to the 1872 Mining Act, the government–and the tax payers–are being robbed of billions of dollars of wealth that is extracted from land that is legally theirs.
Another example–
• The US provides hundreds of millions of dollars in loans and loan guarantees to exporters and US firms investing overseas through the Export-Import Bank and the Overseas Private Investment Corporation. These benefits are typically conferred on health companies, but they provide massive subsidies by instituting the US government as an enforce for overseas partners financial obligations.
There has evolved in IV Washington, DC aculture of corporate-welfare provisions or found as to make almost unimaginable US demands that other countries eliminate industrial subsidies.
It is true that whileWashington has a long history of bailing out companies in distress, the vast majority of US corporate welfare goes to companies that are in fine financial shape. But doesn’t this make such subsidies less rather than more defensible ?
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