The exact way in which the USA has gone about calculating the level of support for Airbus came under scrutiny last week as World Trade Organisation experts met to consider the latest transatlantic arguments over support for the European airframer.
In the latest exchange on 25 July, the international trade dispute panellists appointed to decide on the merits of the USA's case heard public statements from either side - the US Trade Representative and the European Commission - before entering into closed session the following day to consider the effect of aircraft pricing and subsidy calculation methodology.
The two sides took their dispute over the funding of large civil aircraft to the WTO, after the USA withdrew from the 1992 bilateral EU-US agreement in late 2004.
The USA challenges the granting of member state launch aid for Airbus aircraft, while Europe has complained of similar support mechanisms provided to Boeing.
Both parties have now tabled written submissions revealing their legal arguments supporting their respective cases with the US response to the EU's challenge scheduled to be heard before a different WTO panel on 26-27 September.
"The written submission of the US filed ahead of the hearing is characterised by equal parts of unwillingness/inability of the US to respond to key points raised by the EU, or US attempts at artificially enlarging the figures involved," says the EC.
"The US now seeks to argue that the benefit of [launch aid] alone amounts to as much as $205 billion. This 'estimate' is completely unrealistic. It is more than eight times the capitalisation of [Airbus parent] EADS, $25.8 billion, roughly 12 times the net assets of EADS, $18.4 billion."
The EC charges that as well as the USA continuing to inflate support for research and development while overlooking Airbus aircraft launched without any aid, if the US methodology were to be applied to Boeing the amount challenged by the EU would be $305 billion rather than the contested $23 billion.
"The debate used to be whether launch aid is a subsidy. Now we're far beyond that because it appears the EC isn't contesting that it's a subsidy, only the extent to which it's subsidising," says Bob Novick, external counsel for Boeing.
"Whatever the value of launch aid, it would have had an impact on the financial performance of Airbus because at the time these planes couldn't have been launched on the same terms without it."
Source: Flight International
