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'Preliminary' WTO ruling due on US subsidies to Boeing

Text by FRANCE 24

Latest update : 2010-07-16

A delay in the delivery of a final WTO judgment on 'illegal' US subsidies to aerospace giant Boeing has angered rival company Airbus, who have themselves recently been found guilty of illegally receiving funding from EU governments.

European aerospace giant Airbus had been waiting anxiously for a World Trade Organisation (WTO) ruling, expected Friday, on whether its arch-rival Boeing had received illegal subsidies from the US government.

However, the WTO has postponed a final ruling on the issue until September, and is expected to only deliver a “preliminary” ruling on Friday.
 
The delay has angered both the EU and Airbus, who had hoped that a final decision would avenge a 30th June WTO decision that Airbus had received illegal subsidies from EU governments, notably the UK, France, Germany and Spain.
 
“Because of the complexity of the case, there will be a delay in delivering the [final report],” the WTO said in a statement on 8th July.
 
Airbus parent company EADS had hoped that a concrete judgement would take the sting out of the earlier WTO ruling.
 
EU Trade Commissioner Karel de Gucht said he now expected to wait until September for the full WTO ruling on the Boeing issue.
 
‘A one-sided picture’
 
In an interview with German daily Handelsblatt, de Gucht said: "We are not happy with the [30th June] ruling because it gives a very one-sided picture. It now looks as if only Airbus broke WTO rules. This is a ruling that we will in all probability appeal in some areas.”
  
The commissioner added: "Everyone knows that Boeing works in a similar way to Airbus. Instead of financial assistance from the state, they get billion-dollar military or civilian contracts. Washington uses the WTO panel on Airbus against us politically, for example in the [A330] tanker deal for the US Air Force.”
 
War of reports
 
The postponement of the WTO ruling is the latest twist in a long-running saga that has pitted the two aerospace giants against each other since 2004.
 
The US had complained that Airbus had received “illegal help” from the EU totalling 139 billion euros since 1967. The EU hit back saying that Boeing’s financial assistance from the US government was nearer to 300 billion euros over the same period.
 
In July 2005 the WTO decided to launch a double inquiry, in what commentators said was the biggest commercial battle in modern times.
 
The United States demanded that Europe stop its massive programme of subsidies to Airbus (worth some three billion euros) for its A350 passenger jet. On the fiercely competitive aerospace market, the A350 is seen as the main competitor to Boeing’s 787 Dreamliner.

 

Date created : 2010-07-15

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