Energy Subsidies & Trade

The People's Republic of China has agreed to end dozens of controversial subsidies under its World Top Brand, Famous Export Brand and China Name Brand programs that the United States claimed were supporting Chinese exports of a variety of goods, ranging from electronic appliances to apparel and agricultural products.

The government of Kenya has launched the pilot phase of a subsidy program which aims to provide poor Kenyans with a monthly cash allowance to meet their basic food needs.

On 3rd September, the Global Trade Alert (GTA) website was launched in Brussels – set up to monitor government spending in the economic downturn and how it may discriminate against foreign commerce. The site, coordinated by the Center for Economic Policy Research, not only monitors state interventions but also identifies which trading partners they are likely to harm.

As the global financial crisis continues to worsen, many developed and some developing countries have turned to bailout packages to resuscitate stricken businesses, which could potentially violate the World Trade Organization (WTO) rules on subsidies. In fact, some countries, such as Brazil, have already threatened to launch WTO claims against countries that implement them.

The European Union fisheries sector is firmly part of the global fisheries crisis. In Europe more than 80% of known resources are over-fished, while overseas EU fleets have done more than their share to bring commercial productivity of the oceans to an all-time low.

A briefing note by the International Institute for Environment and Development (IIED) (International trade in biofuels: Good for development? And good for environment?) comments that barriers to trade in biofuels are blocking the possible benefits of this alternative fuel.

With the progressive dismantling of formal trade barriers as a result of many rounds of global trade negotiations, subsidies have become increasingly important as a way for governments to regulate economic activity within their territories.

Oxfam has released a research report, by Lance Taylor and Rudiger von Arnim (both of the New School for Social Research, New York) that presents a review and critique of the most widely used trade models based on computable general equilibrium (CGE) models. The emphasis throughout Modelling the Impact of Trade Liberalisation: A Critique of Computable General Equilibrium Models is on methodology.