WASHINGTON, April 22 (Reuters) - The United States would violate world trade rules if proposed government payments to encourage consumers to trade in old gas-guzzling cars can be used to buy only new American-made vehicles, a European Union official said on Wednesday.
"It is our hope that any car scrappage legislation ultimately enacted will remedy these concerns, and that the EU will be able to support this important initiative to promote fuel-efficiency, reduce pollution, and provide a needed boost to the automobile industry," John Bruton, the EU's ambassador to the United States, said in a statement.
President Barack Obama supports passage of a "cash-for-clunkers" bill to pay people to turn in their gas guzzlers and replace them with more fuel-efficient vehicles.
But Europe is worried that a leading version of the legislation, "as currently drafted, provides benefits only for replacement vehicles assembled in the U.S. or North America, a distinction that would harm car manufacturers from other parts of the world, including Europe," Bruton said.
The legislation to which he was referring is sponsored by Democratic Representative Betty Sutton in the U.S. House of Representatives.
Such a provision would be "a clear violation" of World Trade Organization rules requiring a country's laws to treat foreign and domestic products equally, Bruton said.
A fact sheet prepared by the Automotive Trade Policy Council, which represents the Big Three U.S.-based automakers, showed that auto sales jumped in Germany, France, China and Slovakia after those countries enacted such trade-in programs.
But a central feature of the European programs is that they apply to all vehicles, whether assembled in Europe or abroad, Bruton said.
Representative John Dingell, a Democrat and longtime defender of the domestic auto industry, said on Tuesday he would push to include a car trade-in program in a much broader bill taking shape this year to cut global greenhouse gas emissions believed to contribute to global warming.
(Reporting by Doug Palmer; editing by Will Dunham)