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EU 'disappointed' with Airbus ruling, open to negotiations

30 June 2010, 16:50 CET
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(BRUSSELS) - EU trade chiefs expressed "disappointment" on Wednesday after the WTO ruled that subsidies to aircraft giant Airbus were illegal and said they remained committed to a "negotiated outcome."

As Boeing's chief executive claimed a "sweeping legal victory," the European Commission said it was "disappointed with certain of the panel's findings," mainly that so-called repayable launch investment for the A380 aircraft "constitutes an export subsidy."

It was similarly concerned that measures such as roadworks or other infrastructure improvements were deemed "actionable subsidies."

Awaiting World Trade Organization findings on a parallel probe into US state aid for rival planemaker Boeing expected on July 16, Brussels has yet to decide whether or how precisely it will appeal.

"This final report needs to be read together with the forthcoming interim report on subsidies provided in the US to Boeing," said EU Trade Commissioner Karel De Gucht in a statement.

"Only then will we have a full and more balanced picture of this dispute. The EU remains committed to a negotiated outcome to the dispute with no pre-conditions on either side."

Brussels argued that the form of start-up state funding used, involving loans at below-market interest rates, was "fully compatible with WTO rules, as long as the terms of financing are based on market conditions."

"The interest-rate differential is potentially much smaller than the US claimed... the panel clearly does not agree with the US position" on that, said an EU source indicating that this issue would underpin possible appeal grounds.

It said the WTO dispute panel determined that European support "did not result in any job losses in the United States or lost profits to the US aircraft industry" and that it "rejected the allegation that support for Airbus caused 'material injury' to the US aircraft industry.

The EU source said some of the subsidies that were ruled illegal pre-dated 1992 WTO rules governing their use, which was "like being punished for a crime that didn't exist at the time."

Overall, he said the levels were "much, much smaller than the 205 billion" euros quoted in some press reports and said that "we think the panel has inflated the value of subsidies where it has found in the US's favour."

Key elements of US trade dispute 
with EU over Airbus

WTO panel report on Airbus dispute - "European Communities and Certain Member States — Measures Affecting Trade in Large Civil Aircraft"


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