Agriculture and Aerospace

Abstract

Two sectors of the economy that have been of particular concern in subsidy disputes, but have been handled outside of the general provisions of industrial subsidies are agriculture and aerospace. Agriculture was an exception to postwar liberalization initiatives as most governments believed in the necessity of supporting the sector against the chaos of the international market. Agricultural disputes took center stage in the Uruguay Round and caused considerable delay in reaching a final agreement. Aerospace has also been a subject of intense conflict in the past 20 years as competition between the European Community’s Airbus has threatened United States producers such as McDonnell Douglas, Lockheed and Boeing. Similar to agriculture, the primary protagonists have been the United States and the European Community with the latter declaring that its subsidy practices are justified. In both cases bilateral deals have been agreed which restrict but do not eliminate subsidy practices.