U.S., EU Launch Air War

By John S. McClenahen The war over aircraft subsidies launched by the U.S. and the 25-nation European Union (EU) on Oct. 6 could go on for "at least" a year, suggests Air Transport World, like IndustryWeek, a Penton Media publication. The battle began with the U.S. terminating the 1992 U.S.-EU Agreement on Large Civil Aircraft and filing a case with the World Trade Organization (WTO) challenging the "billions of dollars in unfair subsidies" that European governments allegedly provide to Airbus SAS, Chicago-based Boeing Co.'s major rival in the global civilian aircraft market. The EU fired back, filing a case with WTO challenging the "massive subsidies" that the U.S. government allegedly provides to Boeing. About the only thing that the U.S. and the EU agree upon is that the other's alleged subsidies violate the WTO Agreement on Subsidies and Countervailing Measures. The next step is for the U.S. and the EU to enter into a "consultation" aimed at settling the dispute. If that fails, and it is widely assumed that it will, the issue would go to a WTO dispute settlement panel for review, a process that normally takes a year.

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