U.S. Vows 'Aggressive' Push Against EU Support For Airbus

By Agence France-Presse The United States on Oct. 28 vowed an "aggressive" pursuit of the European Union over alleged subsidies to airplane maker Airbus SAS. Recourse to the World Trade Organization cannot be ruled out over "soft loans" being given by EU states for the new A380 superjumbo, which gives Airbus an unfair edge over Boeing Co., U.S. Deputy Commerce Secretary Samuel Bodman says. Airbus claims the scheduled arrival in 2006 of the A380 -- seating 555 passengers in its standard format -- will render the venerable Boeing 747 obsolete. "Before threats get made about who will go where to do what with whom, I would hope that we could have a clear elucidation of the facts, and I would hope that that would be a first step to reaching some accommodation on this matter," says Bodman. The United States insists loans being given by EU member states toward the cost of building the A380 amount to an illegal subsidy. The EU, however, says the loans are repayable and compliant with WTO rules on state subsidies. Airbus and Boeing are competing more fiercely than ever for depleted business after the Sept. 11 terrorist hijackings last year threw the aviation industry into turmoil. Bodman denies that the vast U.S. budget for military research amounted to an indirect subsidy to Chicago-based Boeing, which is also a major supplier of fighter aircraft. Both the EU and the United States provide funding for research into military aviation technology. "The United States, however, does not provide direct funding to Boeing for the development of a specific product," the US official says. "The European governments have chosen to do so in respect to a specific product. We don't think that's fair." Airbus, based in Toulouse, France, has complained that a $15 billion rescue package for U.S. civil aviation enacted after the Sept. 11 attacks amounted to a "Boeing Marshall Plan." Airbus is owned 80% by European Aeronautics Defence and Space Co. NV -- which was formed in 2000 by the merger of French, German and Spanish defense contractors -- and 20% by Britain's BAE Systems PLC. Copyright Agence France-Presse, 2002

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