U.S. takes Airbus dispute to WTO
The United States said it is ready to litigate its dispute with the European Union over subsidies for aircraft manufacturer Airbus and will file a request today with the World Trade Organization to create a dispute settlement panel to decide the matter.
The government said it has tried to negotiate a resolution but the EU has backed off a previous agreement to halt aid to launch new aircraft development projects and simply wants to reduce the amount of aid member countries can give Airbus. Both sides halted preparations to file cases with the WTO for three months this year but could not agree on how to end subsidies for domestic aircraft manufacturers.
“We continue to prefer a negotiated solution, and we would rather not have to go back to the WTO. But the EU’s insistence on moving forward with new launch aid is forcing our hand,” said U.S. Trade Representative Robert Portman, in a statement.
The United States is particularly concerned that EU members are prepared to soon give Airbus $1.7 billion to develop the A350 as a mid-size, long-haul competitor to Boeing’s new 7E7 Dreamliner. Airbus received about $6.5 billion to support the A380 super-jumbo competitor to the Boeing 747. Portman’s office cited a British news report that the British government is prepared to commit $700 million to help get the A350 off the ground.
European subsidies have taken the form of no-interest or low interest loans with repayment tied to the success of sales, as well as research and infrastructure assistance.
Airbus has surpassed Boeing as the world’s largest aircraft maker, in terms of the number of planes produced each year.
Earlier in the day EU Trade Commissioner Peter Mandelson made a new proposal calling for a phased end to subsidies on both sides to keep the aircraft dispute from heading to the WTO. The EU claims that Boeing receives billions in indirect subsidies through U.S. government research and defense projects, and incentives from states where Boeing operates.
The USTR said the WTO process will help keep the dispute from spilling over into other areas of shared interests and cooperation.