Columbia International Affairs Online: Policy Briefs

CIAO DATE: 04/2009

Money for the Auto Industry: Consistent with WTO Rules?

Claire Brunel, Gary Clyde Hufbauer

February 2009

Peterson Institute for International Economics

Abstract

As the financial crisis threatens to lead to a depression, the woes of the automobile industry are second only to the distress of the financial sector. Employment in the US auto industry dropped 9 percent between 2007 and 2008, with much more to follow in 2009. Overall, US auto sales dropped 18 percent between 2007 and 2008, and sales of SUVs plunged 44 percent on a year-over-year basis. Since some sort of financing is required for 90 percent of US car sales, the global credit freeze hit the auto industry with a second blow.