Stimulus packages adopted by the U.S. and other countries to combat the global recession could distort trade, said the European Commission in a confidential report disclosed by Reuters.
"The majority of the measures in the stimulus packages ... affect positively national companies as well as foreign companies and imports. However other parts are aimed at helping national industrial sectors and could be trade-distorting," the report said. "Sector-specific and firm-specific direct subsidies, such as GM and Chrysler loans in the United States ... are potentially the most trade distortive."
Between March and June, the European Commission, which manages trade policy for the 27-member European Union, carried out its investigation into "potential trade distortive measures" conducted by other members of the World Trade Organization. The report will be distributed to EU governments on Friday.
Contact Alan Field at email@example.com.