The USA is preparing to submit the first documents this week in the Airbus-Boeing subsidies dispute before the World Trade Organisation (WTO), amid accusations that its refusal to hand over information to the Europeans has placed its case at a disadvantage. European sources say the USA's refusal to provide documents requested by the European Commission, detailing the precise nature of alleged subsidies to Boeing, could backfire.
The USA last year took its long-held grievances over European launch aid for Airbus to the WTO's dispute settlement body in Geneva, which led to formation of panel DS 316 to hear its case. The EC retaliated by filing its own subsidies complaint and requesting information on US government research and development funding for Boeing. Unhappy with the information provided by the USA, the EC requested a second panel and submitted a new request for disclosure, which the USA refused.
The USA then filed a second complaint against new alleged subsidies, including a £5.2 million ($9.7 million) training grant to Airbus UK from the Welsh Assembly. This led to the formation of a second panel on the US side, DS 347. But the USA refusal to co-operate in the second European case may have backfired, because the WTO has now ruled out a new discovery process in the USA's own DS 347 case.
"Panel 316 suffers from serious birth defects, and panel 347 suffers from lack of discovery process documents. So, in that sense, the USA may have made a mistake in not co-operating in a new discovery process in the EC's new case against them, as they should have," says a senior European source.
The US side says: "Of the four WTO complaints in the subsidies dispute [two US two EU], only one, a US complaint, currently has a litigation schedule. The first time the EU is scheduled to file is mid-January, and that is in response to the 17 October US filing where the USA has pressed for a panel and schedule."
Panel DS 347 was pursued largely to clear up procedural issues, says the US side. "We wanted the two panels to be merged from the outset, but the EC refused. The USA wants only one panel to go forward. We also never asked for a new discovery process, but it makes sense to us to have access to the same documentation."
The subsidies grievance continues