Brussels, 09/02/2007 (Agence Europe) - In Geneva on Friday, the European Commission submitted its first submission in the US World Trade Organisation (WTO) challenge to EU government aid to help Airbus, the European aircraft manufacturer, launch new programmes. The United States lodged its case against Airbus at the WTO on 25 November 2006 (see EUROPE 9308).
The EU's first written submission is a robust response to the various allegations made by the US in its first written submission and 'corrects a number of errors, distortions and mischaracterisations in the US submission,' explains the Commission. The document will remain confidential initially. It intends to justify the Airbus programme launch aid challenged by the United States. The Commission argues that this type of aid is expressly authorised by the 1992 bilateral agreement between the EU and the US on trade in large scale aircraft and the contribution of public aid to aircraft manufacturers. The EU experts argue that the funding is to be repaid throughout the lifetime of sale of the aircraft in question. EU sources told AFP on Thursday that as far as the EU was concerned, it was meaningless to call a repayable loan a subsidy, adding that since 1992, Airbus has received EUR 11 bn but has repaid EUR 13 bn. The same source suggests that the EU is also challenging the 2001-2005 reference period selected by Washington (during which Boeing lost 20% of its market share), arguing that 2003 to 2006 is the proper reference period. Alongside aid for the launch of new programmes, the US is also appealing against regional and local tax aid, infrastructure, R&D funding and support for restructuring. The first meeting of the special WTO Pane will take place on 20 and 21 March 2007. After a new series of submissions and hearings, it is expected to unveil its final report to the parties on 31 October 2007 (but the sheer complexity of the case may mean it will have to be postponed until 2008).
Alongside this, the EU is also preparing its submission for the appeal it has lodged against aid for Boeing in the United States in a different case before the WTO dispute settlement board. On 22 March 2007, it will be lodging its case in Geneva against the 'massive' subsidies paid by the United States to aircraft manufacturing giant Boeing at federal and national level, subsidies in the form of contracts with NASA (the US space agency), the US Defence Department, the National Standards and Technology Institute and the Labour Department, along with tax measures.
European aircraft manufacturer Airbus and US giant Boeing have been accusing each other for years now of receiving illegal government funding. Despite both sides claims that they want to strike an out-of-court settlement, they have never actually met up for talks. (eh)