U.S. Presses WTO to Force End to EU's Airbus Subsidies

March 31, 2012
Action ratchets up pressure in 7-year-old trade dispute over public aid to Airbus and rival Boeing.

The United States announced Friday it was asking the World Trade Organization to create a compliance panel to press the European Union to end subsidies to aircraft maker Airbus.

"In December 2011, the EU claimed to have removed the WTO inconsistencies, but provided no evidence to support its claims. However, the EU has not removed its WTO-inconsistent subsidies and has even provided new ones," the U.S. trade representative's office said in a statement.

Ron Kirk, the U.S. trade representative, said the EU's aircraft subsidies had cost American aerospace companies tens of billions of dollars in lost revenue, and workers their jobs.

"By taking this action today, we are reiterating the Obama administration's commitment to ensuring that every one of our trading partners plays by the rules, and that American companies can compete on a level playing field," Kirk said in the statement.

The U.S. asked for a meeting of the WTO Dispute Settlement Body on April 13 to address the issue.

The U.S. move ratcheted up the pressure in the 7-year-old trade dispute over public aid to France-based Airbus and U.S. rival Boeing (IW500/15).

A parallel pair of subsidy complaints have been making their way through the WTO dispute process.

Friday's action came in response to a WTO ruling last June that found that the EU and four of its member states had provided more than $18 billion in subsidized financing to Airbus, the USTR noted.

The EU was given six months to comply with that ruling.

In December, the EU said it had complied but the United States sought more information to verify the claim, holding consultations with the EU in January.

"The EU was unable or unwilling to substantiate its claims to have addressed the WTO inconsistencies, and the consultations failed to resolve the dispute," the statement said.

Kirk said the United States remained ready "to engage with the EU in any meaningful efforts that will lead to the goal of ending subsidized financing at the earliest possible date."

The European Union expressed regret at Washington's move Friday, while alleging that the United States itself has not reeled in its WTO-illegal support for Boeing.

"We regret that the U.S. has chosen to take this step, since the EU notified its compliance with its WTO obligations in the package of steps taken at the end of 2011, and the U.S. has yet to do the same in the Boeing case," said the European Commission's trade spokesman John Clancy.

Copyright Agence France-Presse, 2012

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