EU claims victory in Boeing ruling

09:38, September 17, 2010      

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The European Union said Wednesday that it had won a victory against US subsidies for Boeing that it hoped would set the stage for a negotiated settlement that would allow European governments to continue to help Airbus develop new aircraft.

"This was a very thorough analysis that, in fact, supports our view in this dispute," EU Trade Commissioner Karel De Gucht told Reuters during a visit to Argentina. "The only way out of this dis-pute is in fact by finding a negotiated settlement."

Boeing said that if reports about the decision were accurate, "then the ruling amounts to a massive rejection of the EU case and confirms that the European launch aid to Airbus stands as the single largest and most flagrant illegal subsidy in the aerospace industry."

The ruling follows WTO condemnation in June of illegal European subsidies for Boeing rival Airbus, mostly in the form of European government "launch aid" loans. It is the biggest bilateral trade dispute ever before the WTO.

Two US sources familiar with the case acknowledged that the panel found that Boeing had benefited from federal and other subsidies, but to a much lower extent than its European adversaries suggest.

They said the WTO had found subsidies worth about $5 billion, including $2 billion that already has been subject to an earlier settlement.

However, a European source said that whether the report found $5 billion or even $15 billion in subsidies was not the important issue.

"Our reading is that this is an absolutely seminal victory for Europe in the sense that Boeing has claimed for many years that they were a stock-listed company operating according to market rules, and they didn't violate the WTO," the official said.

The report, issued to only EU and US officials, will not be made public until possibly mid-2011.

Boeing argued that any aid for which Washington was faulted paled in comparison with subsidies for Airbus that were denounced by the WTO in a ruling in a parallel case.

"Nothing in today's public reports on the European case against the US even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received," the company said.

Separately, Airbus said Thursday it controlled more than 40 percent of the aviation sector in China and was set to overtake Boeing in the market.

Source: Global Times


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