United States set to ramp up aircraft trade war

Boeing and US goverment to demand EU be punished with sanctions over Airbus subsidies

The United States will inflame the long-running trade dispute between aircraft manufacturers Boeing and Airbus by demanding that the World Trade Organisation look to impose annual sanctions of up to $10bn (£6.3bn) against the EU.

Since 2005, the US and EU have issued claim and counter-claim that the other has provided their aeroplane producers with illegal subsidies. On Wednesday, the four parties are expected to receive the WTO's decision on the US's appeal against last year's finding that Boeing had been granted illegal subsidies of at least $5.3bn between 1989 and 2006.

Whatever the result, the US government and Boeing are determined to push forward their claim, arguing that countries where Airbus is based – France, Germany, Spain and the UK, where 15,000 people are employed in Bristol and North Wales to build wings – are still providing the manufacturer with forms of preferential loans. This would go against the terms of another WTO verdict.

The US is particularly anxious over the A350, a passenger jet that is under development and is receiving record-breaking orders from airlines and governments around the world.

The US has called for sanctions which would not necessarily be against aircraft, but could be on anything the EU produces from French cheese to British meat. In the next few weeks, the US will ask the WTO to establish a panel of three independent experts from countries which are relatively unaffected by the dispute – previously, panels have been comprised of South Americans – to look into whether the EU has continued to provide illegal subsidies.

However, the EU and, Airbus parent company, EADS are understood to have prepared yet another case should the US push through with its plan. This will focus on several US programmes involving Boeing, including an announcement by President Barack Obama earlier this month to re-authorise the Export-Import Bank to help the manufacturer and others secure sales abroad.

These two filings, which could take the form of new cases or extensions to the latest claims, could mean that the trade fight is not resolved until 2018, 13 years after Boeing made the original claim. This would make it the longest-running dispute in WTO history, and is almost certain to occur as each side have privately vowed to appeal any findings that do not go their way.

EADS is known to be keen that the dispute is settled through peace talks as soon as possible, as it fears that other manufacturers from countries such as China and Russia will emerge and break the duopoly while they spend hundreds of millions of dollars fighting each other. However, Boeing sees the matter as a point of principle, believing that EU subsidies have helped Airbus claim more aircraft orders in recent years.

The appeal decision, that arrives this week, will not be made public until at least next month. The parties are under strict instructions to keep the findings private and are given time to redact any information that they consider to be commercially sensitive.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created