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WTO overturns part of US aid complaint ruling on Airbus

18 May 2011, 22:52 CET
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WTO overturns part of US aid complaint ruling on Airbus

Photo Airbus

(GENEVA) - The World Trade Organization's appeal body on Wednesday overturned part of its ruling on Washington's complaint against the European Union over aid for aviation giant Airbus.

While the appellate body upheld findings that some subsidies including launch aid provided by Brussels "have caused serious prejudice to the interests of the United States," it reversed a key finding that financing by Germany, Spain and Britain for the development of the A380 superjumbo amounted to a export subsidy.

"As a consequence, the appellate body reversed the panel's recommendation that the European Union withdraw prohibited subsidies within 90 days," the WTO said on its website.

EU trade commissioner Karel De Gucht hailed the finding, saying that he was "particularly pleased with this important result."

"The US central claim that Airbus received prohibited export subsidies has been dismissed in its entirety," De Gucht said ahead of six-month negotiations on redress over other aspects of the case.

Airbus also claimed victory, with Airbus chief executive Tom Enders proclaiming: "This is a big win for Europe."

However, both Washington and Boeing claimed the decision as a major victory.

They pointed to the appellate body's decision to uphold arbitrators' June 2010 ruling that some subsidies, including instances of launch aid for the development of Airbus airliners, are "incompatible... because they have caused serious prejudice to the interests of the United States."

"This is a clear, final win for fair trade that will level the playing field for America's aerospace workers," Jim McNerney, Boeing's chairman and chief executive, said in a statement.

"The WTO has concluded that launch aid and other illegal Airbus subsidies distorted the market, harmed US industry and now must end."

US Trade Representative Ron Kirk also noted that the appeals body "confirmed without a doubt that Airbus received massive subsidies for more than 40 years and that these subsidies have greatly harmed the United States, including causing Boeing to lose sales and market share in key markets throughout the world."

Kirk claimed that the overturned finding amounted to a small fraction of the illegal subsidies.

"While it revised the underlying findings for the United States from $20 billion to $18 billion, the message in the Appellate Body report is clear -- launch aid is illegal and the European Union and the member states should refrain from future launch aid disbursements," he stressed.

The WTO appeals body said the main subsidies covered by the ruling include launch aid provided to Airbus by Britain, France, Germany and Spain for the development of the A300, A310, A320, A330/A340, A330-200, A340-500/600, and A380 projects.

The Appellate Body found that the subsidies had caused Boeing to lose market share in key markets such as the European Union, China, and South Korea.

An appeal ruling on a tit-for-tat case brought by the European Union against US state aid for Boeing is pending.

In that case, arbitrators had issued a ruling on March 31 which partly upheld the EU complaint against US aid for Boeing.

Full details: World Trade Organization

Background on the Airbus/Boeing cases - European Commission


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