The head of the World Trade Organization has warned that government aid to banks and carmakers could lead to disputes over trade and competition and send mixed messages about free-market capitalism and the relationship of government and business.
In a report to the WTO's 153 member states, Director-General Pascal Lamy said government bailouts designed to prevent financial crises must neither violate global trade regulations nor discriminate against foreign companies.
The WTO's dispute settlement body arbitrates disagreements between governments involving tariffs, subsidies and other barriers to equitable trade.
Trade experts say U.S. government loans for Chrysler and GM as well as car industry aid packages in Germany, China, Korea and elsewhere could all lead to WTO complaints.
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