US launches new WTO attack on Airbus

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Claims made a week ago by Europe that it has made "limited" adjustments to comply in full with a World Trade Organisation ruling against some policies supporting Airbus product development have drawn fire from Washington.

In the latest exchange in a long-running pair of tit-for-tat transatlantic WTO disputes over subsidies to Airbus and Boeing, US Trade Representative Ron Kirk said the "limited information in that notificationappears to show that the EU has not withdrawn the subsidies in question and has, in fact, granted new subsidies to Airbus' development and production of large civil aircraft".

Kirk has asked the European Union enter into consultations on the matter, and wants the WTO Dispute Settlement Body in Geneva to impose countermeasures annually, in the range of $7-10 billion.

In keeping with WTO practice, Europe's submission remains confidential pending translation and consultation with the parties.

But reflecting the character of the dispute, Boeing said it was "disappointed that EADS/Airbus and European governments have failed to comply with the WTO's landmark ruling against launch aid and other forms of illegal government subsidies that Airbus has received for more than 40 years. This illegal subsidization of Airbus products - plane after plane - is unsustainable and must stop now."

Responding to Boeing's retort, Airbus head of public affairs Rainer Ohler said: "Boeing has made a lot of claims and requests since the begining of this dispute and none of them proved to be true. We believe it is time for the WTO to review and assess the implementation presented by the EU. Airbus is confident it has addressed WTO demands in a comprehensive manner."

Kirk remarked: "The WTO clearly found that every single grant of launch aid to Airbus, for every single aircraft that company produced, was a WTO-inconsistent subsidy that caused unfair adverse effects to US industry and jobs."

The dispute dates to the mid-2000s, and Boeing's original complaint was followed by a European counterclaim that Boeing enjoys illegal subsidies from local governments, NASA and the defence department. The WTO upheld aspects of both claims earlier this year, and the USA/Boeing will have to demonstrate compliance in about March 2012.

Lawyers close to the European case believe the only viable resolution can be achieved by politicians in Washington and Brussels, as available legal manoeuvres will continue to block the levy of fines or other WTO-imposed sanctions.

For a full background report on the subsidies dispute see