BRUSSELS - U.S. financial aid to carmakers and a number of stimulus packages adopted by other countries to fight the economic slowdown could distort global trade, a confidential European Commission report said.
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, obtained by Reuters, said.
Sector-specific and firm-specific direct subsidies, such as GM and Chrysler loans in the United States ... are potentially the most trade distortive, said the report by the Commission, which oversees trade policy for the 27-nation European Union.
The report follows a regular probe carried out by Brussels between March and June into potentially trade distortive measures conducted by other members of the World Trade Organization. It will be given to EU governments on Friday.
Brussels criticizes a raft of countries, notably the United States, China and Russia, over elements of their stimulus packages.
The Commission said the measures that it identified could harm trade flows, which have dwindled in the worst financial crisis in about 80 years.
The report also highlights concerns over a so-called U.S. car scrappage scheme and incentives given to consumers to buy eco-friendly cars in Japan.
(Reporting by Darren Ennis; Editing by Dale Hudson)