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
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy