|
Eu us trade wars with airbus boeing { October 6 2004 } Original Source Link: (May no longer be active)
http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.htmlhttp://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html
Brussels hopeful of winning dispute against US
By Edward Alden and Caroline Daniel in Washington and Raphael Minder in Brussels
Published: October 6 2004 14:43 | Last updated: October 7 2004 12:22
The European Union on Thursday said it was confident of winning a dispute against the US at the World Trade Organization over government subsidies for Airbus and Boeing, their flagship civil aircraft makers.
“We have carefully looked at the rules and we are confident that in this case... we have chances of winning it,” said Arancha González, the EU spokeswoman for trade.
The US and the European Union on Wednesday launched the biggest dispute in the history of the World Trade Organisation in an effort to end what each side said are massive subsidies to Boeing and Airbus.
In a dispute settlement case filed at the Geneva headquarters of the WTO, the US alleged that Airbus had received a total of at least $15bn in illegal "launch aid" from the France, UK, Germany and Spain, allowing it to overtake Boeing as the world's largest aircraft maker. The US also said it would terminate a 1992 bilateral agreement that had curbed but not ended subsidies, alleging minor violations by the EU.
The EU Commission responded immediately by filing a counter-case charging that Boeing had received about $23bn in prohibited subsidies since 1992 in the form of research and development assistance from US government agencies. The EU also challenged pledges from Washington state to offer about $3bn in tax breaks for Boeing production of its new 7E7 jet.
Wednesday's moves raise the prospect of an unprecedented double ruling by the WTO, which could conclude that both aircraft makers have been receiving funding that contravenes WTO rules, and may authorise billions of dollars in trade retaliation.
Ms González said relations between Brussels and Washington would not be affected by the dispute and denied earlier remarks by EU officials arguing that the decision was driven by politics, with the US hoping to shore up President George W. Bush's re-election prospects and responding to charges from Democrat John Kerry that he has failed to enforce trade agreements.
Ralph Crosby, chief executive of the North American division of EADS, the parent company of Airbus, said he was "disappointed" by the action taken by the US government noting that it comes a month before the elections in the US. "It is rather a curious coincidence."
But US officials said the move was dictated by Boeing's commercial competition with Airbus. Boeing fears that the four European governments will offer new aid, in the form of loans repayable based on future sales, to allow Airbus to build a competitor to its 7E7 "Dreamliner" jet.
Boeing, which in the past had opposed a WTO case over fears it would anger its airline customers, said yesterday it supported the action. "Boeing will support any course of action the US government feels is necessary to reach a new agreement" that ends all subsidies, said Harry Stonecipher, Boeing chief executive.
US officials said they are still hoping for a negotiated solution over the next 60 days, the mandatory consultation period.
Robert Zoellick, US trade representative, said the US remains open to negotiating "an agreement that ends all new subsidies." But Pascal Lamy, the EU's trade commissioner, said: "The US move . . . is obviously an attempt to divert attention from Boeing's self-inflicted decline . . . If this is the path the US has chosen, we accept the challenge."
|
|
