WTO rules European loans for Airbus illegal: US lawmakers
The World Trade Organisation (WTO) has ruled that European loans for Airbus were illegal subsidies under world trade rules, said US lawmakers, but European sources said Washington did not win a sweeping victory.
The findings, which came in a confidential 1,000-plus-page ruling, are the latest chapter in a decades-old battle between US manufacturer Boeing and European rival Airbus for dominance of the global aircraft market, a major source of jobs on both sides of the Atlantic.
The decision, which will not be made public for months, was handed out to the United States and the European Union at WTO headquarters in Geneva on Friday. Lawmakers from Washington state, where much of Boeing's production work is done, said the WTO agreed with the United States that European "launch aid loans" to help Airbus develop the A380 and other top-selling planes violated global rules.
"I applaud the WTO's decision that government subsidies of Airbus are illegal," said Senator Maria Cantwell. "When finalised, this long-awaited ruling will help restore true competition in the commercial aviation market."
Representative Norman Dicks said "definitively confirms" the US argument in the case. "But what is discouraging is the damage that has been done to America's premier airline manufacturer, which has suffered the loss of 20 per cent of the market share – representing hundreds of billions of dollars in value and tens of thousands of jobs – since our concerns were first raised with the Europeans," said Dicks.
Dicks and Cantwell were briefed on the ruling by US trade officials.
European sources said the ruling was not as clear-cut as the lawmakers and US private sector sources claimed.
"The ruling is not a black-and-white case. It is simply not a great victory for the United States," one EU source said on condition of anonymity. "The assertion that the WTO report says that all 380 funding is a prohibited subsidy is wrong. The findings are much more nuanced than that. The panel did not find that launch aid is a programme," said a second European source. The latter point is significant because it means the ruling does not have implications for some $4 billion (Dh14.69bn) in planned European Government loans for Airbus' project.
US sources took issue with that interpretation, arguing it would be inappropriate for European governments to provide loans for the A350 on the same terms ruled illegal by the WTO for earlier projects.
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