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Share Name | Share Symbol | Market | Type |
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Generali | AQEU:GM | Aquis Europe | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.24 | 1.07% | 22.68 | 22.66 | 22.67 | 22.68 | 22.485 | 22.51 | 145,559 | 16:50:12 |
A provision in the U.S. House-passed climate bill could violate world-trade rules by favoring U.S. auto makers in the distribution of potentially more than $2 billion in government subsidies, a leading free-trade group warns.
The provision would provide an estimated $2.14 billion over five years to auto makers to build plug-in electric vehicles "that are developed and produced in the United States." The provision would also direct the government in distributing the monies to give preference to auto makers "located in local markets that have the greatest need for the facility."
The language was added late in negotiations on the bill after lobbying from the United Auto Workers, whose members are predominantly employed by U.S. auto makers that operate in hard-hit areas such as Michigan.
The program could effectively amount to government subsidies for U.S. auto makers, likely violating World Trade Organization rules that prohibit countries from treating foreign companies worse than domestic ones, said Bill Reinsch, president of the National Foreign Trade Council.
The program is the latest to come under criticism from trade experts and businesses that accuse Congress of trying to pass legislation designed to benefit U.S. companies over foreign competitors.
Reinsch warned that the program for electric vehicles would invite retaliation from other countries.
"One of two things will happen: either the Europeans will complain about it or they'll do the same thing and they'll provide subsidies in Europe to European car manufacturers," Reinsch said. "From a trade-policy standpoint, either outcome is market-distorting."
His organization plans to raise the issue with lawmakers and the Obama Administration in coming weeks. The Senate is currently crafting its own climate-change bill.
Michael Stanton, president of the Association of International Automobile Manufacturers, said the program appears biased against foreign-based car companies.
Toyota Motor Co. (TM), for example, is developing and manufacturing the plug-in version of its Prius model in Japan.
General Motors Corp. (GMGMQ), meanwhile, plans to make its plug-in Volt in Michigan.
"We're going to be taking a look at this and seeing what we can do," Stanton said.
A Toyota spokeswoman said the company was still studying the climate bill and wasn't prepared to comment.
Alan Reuther, chief lobbyist for the UAW, said the union supported the provisions in the House bill as a way to ensure government money is being used to create jobs in the U.S.
"This is neutral between all of the companies, foreign and domestic companies," Reuther said. "It is saying, 'Invest in this country and we'll get you help to do that."
There is "no reason Toyota can't produce the Prius in this country," he added.
The money for the program in the House bill would be funded through the sale of permits to emit greenhouse gases under the so-called cap-and-trade system.
The Natural Resources Defense Council, using estimates for permit prices by the Congressional Budget Office, estimates that the financial assistance for plug-in electric vehicles would be about $2.14 billion between 2012 through 2017.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@dowjones.com
(Ian Talley contributed to this article.)
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