Brussels, 28/12/2000 (Agence Europe) - The European Commission will serve as a "shield for Airbus". This was Brussels' reply to the warning issued by the President of the United States on the eve of the industrial launch of the A380 high-capacity carrier in a market slot that has been Boeing's private domain for 30 years (see EUROPE of 20 December, pp. 10-11).
The arguments used by the White House, namely that the loans made to the European consortium violate World Trade Organisation (WTO) rules, "do not hold water", said the Commissioner responsible for the common trade policy, Pascal Lamy, last Saturday. "It is normal that various means, above or under the table, should be used to try to challenge the rules of the game; in a fight like this one, any argument is good", he declared on French radio EUROPE 1. And he warned: "We are there to act as a shield. A solid and thick shield that will stay in place. And I can say that we will defend our Airbus." Mr Lamy recalled that the United States grants subsidies to the Seattle-based aircraft maker, through military credits, while "we do so with repayable loans". Mentioning the example of the A320, he stated that "European taxpayers have been fully repaid, with interest, for aid granted to Airbus".
Several days earlier, his spokesman also insisted on the compatibility of repayable loans with WTO rules. "If the United States decides to initiate a procedure against the Union [in Geneva], the Commission will not hesitate to propose that the Council [of European Ministers] take similar measures by challenging the indirect subsidies Boeing enjoys through its contracts with NASA and the Pentagon", stated Mr Lamy. He added that "these indirect subsidies are well over" the limit of 3% of aviation groups' annual turnover, a limit established by the 1992 Euro-American agreement on public aid for the construction of civil aircraft. This agreement, which Washington seems to have called into question in the last few days, also imposes a ceiling on direct credits in the amount of 33% of total cost of the construction of aircraft of at least 100 seats. This matter will be at the heart of consultations on trans-Atlantic aviation disputes, scheduled some time ago, on 11 January in Washington.