EU appeals against WTO ruling on Airbus subsidies

(GENEVA) - The European Union hit back on Wednesday against the World Trade Organization's ruling which partly backed a US complaint that some state support for aerospace giant Airbus is illegal.

Announcing its appeal, Brussels said in a statement: "While the report sides with the EU in rejecting a significant number of US claims, there are other aspects of the report which need to be corrected or clarified."

The WTO confirmed reception of the appeal filed on Wednesday morning.

In a 1,200-page ruling made public in June on Washington's complaint, the WTO asked EU states to halt some aid for the development and export of Airbus airliners.

It notably accepted three out of seven claims by Washington that key launch aid amounted to export subsidies which are illegal under WTO rules.

WTO arbitrators had also found that 21 instances of support granted to Airbus for the launch of the its A300 aircraft series -- the company's commerical fleet -- amounted to subsidies as the interest rates levied were charged at below market rate.

Brussels said it would challenge the findings on export subsidies and on launch aid measures.

It is also contesting the ruling that a causal link has been established between support to Airbus and adverse effects to Boeing.

In addition, it is disputing the panel's conclusion that infrastructure made available by EU member states to Airbus in Hamburg, Bremen in Germany and Toulouse in France amounted to illegal subsidies.

"This dispute is too important to allow the legal misinterpretations of the panel to go unchallenged," said EU Trade Commissioner Karel De Gucht.

"What is more, not appealing would allow for an unhelpful precedent for the WTO membership as a whole," he added.

Brussels pointed out that the case was not only unprecedented in factual but also legal complexity, and addressed issues that had not been previously settled in WTO case-law.

"A damaging precedent could arise if certain of the panel's legal interpretations are allowed to stand, resulting not only in a disservice to the entire WTO membership but also putting an unwarranted burden on Airbus and the member states concerned," the EU said.

Airbus spokesman Rainer Ohler described the appeal as the "logical and necessary next step in the never-ending WTO story.

"Today, the appeal gives Airbus strong confidence that some of the doubtful elements will be reviewed and overturned -- in particular the export subsidy argumentation," he said.

"We are convinced that the EU legal argumentation is very strong," he added.

Under WTO rules, the appellate body should make a decision on the appeal within 90 days.

However, given the complexity of the case, Brussels expects the decision to be delayed, further stretching out the complaint pitting the two aerospace rivals that began in 2004.

Meanwhile, a counter claim filed at the WTO by the European Union against US state financing for Boeing has also been delayed.

The WTO was meant to have delivered a ruling in July but has postponed it to as late as mid-September, a move that has angered the European Union.