Governments’ Interventions into the Real Economy under WTO Law Revisited: New Tendencies of Governmental Support of the Automobile Industry

Abstract

The automobile industry has received unprecedented governmental support during the ongoing economic crisis. Rescue packages have been provided to sustain the significant market branch and asserted key driver of growth, export, innovation, and jobs particularly in the EU and the United States and to avoid further downward spirals, which risk affecting the national economies on a wider scale. Since such tendencies can have trade distorting effects, however, the question arises whether the increased governmental interventions are compatible with the World Trade Organization (WTO) legal framework, which arguably enshrines free trade theory in international law. By adopting a legal perspective, this contribution shall address the state’s role in global markets and examine the degree of policy space that is conferred to WTO Member States in support of real economy sectors.