Boeing expects WTO ruling on Airbus dispute this month

(WASHINGTON) - The World Trade Organization is expected to rule this month on a US complaint that the European Union provided illegal subsidies to arch-rival Airbus, a Boeing spokesman said Monday.

Tim Neale, a spokesman for the US aerospace giant, said the company based its expectation on testimony by the top US trade envoy to Congress that a final WTO ruling was expected within a few weeks.

In response to a question about the timing of the WTO decision at a Senate Finance Committee hearing on March 3, US Trade Representative Ron Kirk said: "We're hopeful, within the next several weeks that the appellate body would give us the final ruling on the first part of that complaint."

"That suggest to us by the end of March," Neale told AFP.

The US Trade Representative's office was not immediately available for comment.

The final WTO ruling will come in the context of trade tensions between the US and the EU over the US Defense Department's competition for a 35-billion-dollar contract to supply the air force with 179 aerial refueling tankers.

Boeing is poised to win the contract after Northrop and its partner, the European Aeronautic Defence and Space Company, said they would not bid for the deal on March 8.

European officials and EADS, which owns French-based planemaker Airbus, charge that the Pentagon altered bidding rules for the contract in order to favor Boeing's all-American offer.

The US filed the WTO complaint against the EU in October 2004, charging that it illegally provided subsidies to Airbus.

It said an accord that allowed Brussels to provide up to a third of development costs of new airliners was no longer valid since Airbus was now a major industry player and not the fledgling firm when the deal was struck.

While Boeing and Airbus are implicated in the case, the WTO only deals in cases brought by its member states and not individual companies.

The Geneva-based WTO confirmed on September 4 that it had issued a confidential interim ruling on the long-running dispute between the United States and the 27-nation EU.

That ruling on the US challenge to EU Airbus subsidies was given to the governments.

The EU has filed a complaint against the US alleging state aid to Boeing.

Some analysts say a clear-cut judgment was unlikely given the complexity of the case.

The final WTO decision will also be confidential, until the WTO has it translated into many languages and publishes it, Neale explained.

"It's an important case for us," Neale said, adding: "We don't have any direct contact with the WTO panel."