Request will challenge £5.2 million Welsh grant to underwrite A350 training costs

The USA is poised to request a second World Trade Organisation (WTO) dispute panel to rule on what it believes is further unlawful European support for Airbus since it initiated the trade dispute last October.

The panel request, which will be submitted to a 21 April meeting of the WTO’s Dispute Settlement Body, will centre on alleged new subsidies for Airbus and include information responding to European Union claims that the USA did not address in its original panel proceedings.

The USA alleges that the decision in January by the Welsh Development Agency to award Airbus UK a £5.2 million ($9.21 million) grant to underwrite A350 training costs is unlawful.

The USA secured last July the establishment of its original WTO panel to rule on its claims that European governments have been providing illegal subsidies to the European aircraft manufacturer and that they caused significant price undercutting, price depression and lost sales for US rival Boeing.

This was countered by the EU, which secured its own WTO panel to rule on similar claims of unlawful government subsidies to Boeing.

The EU then requested and secured the establishment of a second panel in February to address what it said was the refusal of the USA to provide information to the first panel on 13 alleged subsidies. The USA has to-date refused to provide the information on the grounds that these were never raised in the EU’s original request for consultations, an issue which the EU is expected to pursue at the 21 April meeting.

The procedural posturing has already led to the July deadline for completing initial investigations in the dispute being formally suspended. The first panel hearings in the disputes were scheduled to take place in June, with the second round of hearings in September and an eventual ruling sometime in early 2007.


Source: Flight International