WTO to decide on EU compliance on Airbus subsidies

(GENEVA) - The World Trade Organization is to rule on whether the European Union has removed some subsidies to aircraft maker Airbus after a compliance panel was set up Friday at the request of the United States.

Washington announced last month that it was asking the WTO to create a panel to press the EU in the seven-year-old trade dispute over public aid to France-based Airbus and US rival Boeing.

"The panel has been established," said a WTO spokesman on Friday following a meeting of its Dispute Settlement Body.

The EU said in December that it had submitted a "package of actions that achieves full compliance" with a WTO ruling in May last year that considered some EU subsidies to Airbus incompatible with WTO rules.

The US disputes the EU position, saying that the EU had not removed its WTO-inconsistent subsidies "and had even provided new ones."

Ron Kirk, the US 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.

The panel of experts has 90 days to rule on the issue from Friday but this period could be extended if necessary.

It's the latest stage in a battle which has seen a parallel pair of subsidy complaints making their way through the WTO dispute process since being filed within hours of each other in October 2004.

On March 12 the WTO ordered the US to halt unfair subsidies and tax breaks to planemaker Boeing in response to a complaint by the EU.

The US said on Friday it intended to implement the ruling by the agreed deadline of September 23.