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Europe

Europe claims victory in latest aviation subsidy row

Text by FRANCE 24 (with wires)

Latest update : 2010-09-16

Leaders from France and European aircraft maker Airbus claimed victory Wednesday after the World Trade Organization judged US subsidies to Boeing to be illegal.

European aircraft maker Airbus has claimed victory following the World Trade Organization's ruling that billions of dollars in anti-competitive subsidies awarded to Boeing by the US were illegal.

French officials expressed "great satisfaction" with the ruling of the WTO, insisting that the organisation’s panel condemned the US government support.

"This report provides an enormous satisfaction to the French and European aeronautics and preserves jobs and the future of this industry", said French Environment Minister Jean-Louis Borloo.
 
The WTO is said to have found that Boeing received tax breaks, research grants, and export rebates from state and federal agencies.  In its complaint, the EU had claimed that Boeing received about 20 billion dollars in cross-subsidies from the Pentagon and NASA, and an additional 4 billion dollars from the state of Washington.  
 
Just a year ago, WTO rapped the EU for illegally providing subsidies to Airbus, a unit of the European Aeronautic Defence and Space Company.

In a statement Tuesday, Boeing said that Airbus had financed development of its A380 and A350 aircraft through illegal subsidies and called on the company to adopt a more market-based approach to research and development.

"Nothing in today's public reports on the European case against the US even begins to compare to the 20 billion dollars in illegal subsidies that the WTO found last June that Airbus/EADS had received", Boeing said.

In Washington, US lawmakers aligned with either Airbus or Boeing were divided on the WTO’s findings.

US Senator Richard Shelby of Alabama noted that "while the confidential nature of this report will allow Boeing supporters to attempt to spin the facts in the media, it is clear that they can no longer rationally claim that this trade dispute is one-sided".
 
Shelby has been pushing for Airbus to win a US government contract to build a fleet of refueling tankers for the US Air Force at its Alabama facilities.
 
But Representative Todd Tiahrt and Senator Sam Brownback of Kansas said the cases of Boeing and Airbus are quite different.
  
"None of the alleged subsidies to Boeing have anywhere near the market-distorting effects of the launch aid the EU provided to Airbus", the two lawmakers said.
 
Brussels brought its case to the WTO on October 6, 2004 -- the same day that Washington complained about EU subsidies to Airbus.

Date created : 2010-09-16

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