WTO To Comment on Latest U.S. Claims against EU

 - December 12, 2011, 3:47 PM
The U.S. claims the EU has provided illegal state aid for every Airbus widebody, including the A350 XWB. (Photo: Airbus)

The antagonists in the long-running trade dispute over government subsidies to Boeing and Airbus are awaiting World Trade Organization (WTO) comment on the latest U.S. call for sanctions against the European Union. The WTO’s Dispute Settlement Body was due to consider a “status report” from the European Union at a December 19 meeting in Geneva. On December 9, U.S. Trade Representative Ron Kirk asked that the EU enter into consultations related to its December 1 claim that it complied fully with the last WTO ruling. 

“The United States has reviewed carefully the limited information in that notification,” said Kirk in a statement. “It appears to show that the EU has not withdrawn the subsidies in question and has, in fact, granted new subsidies to Airbus’s development and production of large civil aircraft.” The new subsidies in question would involve the A350 XWB, which the previous ruling did not address. The U.S. also asked the WTO Dispute Settlement Body (DSB) in Geneva to impose annual “countermeasures” in response to the EU’s claim of between $7 billion and $10 billion.

Initiated in October 2004, the U.S. complaint claimed that Airbus had received illegal launch aid and other subsidies for decades. The DSB recommended that the EU and the EU member states that financially support Airbus take appropriate steps to withdraw the subsidies or remove the adverse effects within a six-month period ending December 1. 

According to the U.S. Trade Representative, the WTO findings—still not made public—showed that illegal EU aid to Airbus directly resulted in Boeing losing campaigns against Airbus for sales to easyJet, Air Berlin, Czech Airlines, Air Asia, Iberia, South African Airways, Thai Airways International, Singapore Airlines, Emirates Airlines, and Qantas.

For its part, Airbus claims the EU effected the “limited” changes in policies and practices the WTO found illegal.

“We only needed to make limited changes in European policies and practices to comply with the appellate body’s report; we did what we needed to do and we did it in the agreed time frame,” said Airbus head of public affairs and communications Rainer Ohler. “Today, we call on the U.S. and Boeing to do the same next year. We realize that this will mean substantial sacrifice for Boeing due to the far broader scope and scale of WTO findings of U.S. subsidy to Boeing.”

Another WTO panel expects to review a separate ruling that the U.S. has illegally subsidized Boeing.