Brussels, 19/10/2004 (Agence Europe) - The last tête-à-tête, a "courtesy" one between Trade Commissioner Pascal Lamy and American Trade Representative Robert Zoellick in Brussels on Monday before they both leave the posts they have held for several years (yesterday's EUROPE, p.8) failed to make any headway on the major transatlantic trade disputes of the moment, such as the one on State aid to Airbus and Boeing and the amendment of the Foreign Sales Corporation regime (FSC). These dossiers were briefly mentioned, said Mr Lamy's spokesperson on Monday evening, but no decisions were made. Mr Lamy did, however, apparently explain to Mr Zoellick that the Commission does not intend to establish the official link between the complaints submitted to the WTO on Airbus/Boeing, and the possibility of European sanctions (or part thereof) being kept in place against Washington should the new legislation to replace FSC still not be compatible with the WTO verdict (which came down against FSC). The Commission is faced with a compliance problem of the new American law and the WTO rules, said Mr Lamy. The final version of the new law, which has just been approved by the American congress, contains a number of elements which the EU would have preferred not to see (such as the transition period allowing American exporters to continue to benefit from the FSC until 2007), and other provisions the EU cannot accept, such as the so-called "grand fathering" clause allowing all contracts which have already been concluded, but which will be phased in over several years, to continue to benefit from the regime beyond 2007. This clause is of particular benefit to Boeing, a "coincidence" according to the Commission spokesperson, but one which makes the situation that much harder due to the Airbus/Boeing complaints being looked at by the WTO, explained Mr Lamy to his American partner. For the time being, the Commission is looking in detail at the 700 pages of the new American law which will amend the FSC, and only once this assessment is complete, probably within the next few days, can it decide on whether to lift trade sanctions in place since March. "We are checking whether the grand fathering clause also applies to Boeing", explained Mr Lamy's spokesperson. The Commission feels that the impact of this clause is crucial to assess whether the American law is in line with the WTO's ruling. The spokesperson refused to speculate as to what the Commission's decision would be if it felt that the new American law was not fully in line with the WTO's judgement. Technically, however, "if we do not feel that it is in compliance, we will ask the WTO to confirm this", she said. According to various sources, Mr Zoellick warned the EU that if it established a link between the FSC and the other disputes, targeting anti-FSC sanctions directly at imports of Boeing aircraft, this would put pressure on the American authorities to react along the same lines.
The Commission has proposed to Washington to start negotiations at the WTO on Airbus/Boeing on 28/29 October, but according to the Commission, it has yet to hear back.