EU meets WTO deadline over Airbus subsidies

Tom Miles
Friday 02 December 2011 01:00

The European Union said it had met a deadline for complying with a World Trade Organisation (WTO) ruling against billions of euros of illegal subsidies for the aircraft maker Airbus and outlined its actions in a letter to the US and the WTO.

Neither side involved in the world's largest trade dispute disclosed what steps the EU had taken, but some trade experts doubted it would end the long-running spat between Airbus and its US rival Boeing.

"Through this package we address all categories of subsidies, all forms of adverse effects, and all models of Airbus aircraft covered by the WTO rulings," EU trade spokesman John Clancy said.

The reference to "all models covered by the rulings" is crucial because Boeing is adamant that the EU must not just undo old subsidies, but also promise not to give Airbus any more in future. But the two sides may differ about whether the WTO ruling covers future as well as past payments.

Boeing, with the backing of the US government, has argued that Airbus had been receiving "launch aid and other forms of illegal government subsidies" for more than 40 years and said it would ensure compliance had been achieved.

The EU in turn has complained to the WTO about US government programmes to help Boeing, but that case is still in the appeals stage, with a decision expected next March or April. Mr Clancy said the EU expected an "equally solid set of compliance actions" from the US after the WTO issues its final ruling on subsidies to Boeing early next year.

Airbus, part of Eads, said that only minor changes to European policies were needed to achieve compliance with the ruling by a WTO appeals panel, which ordered the EU to comply by 1 December in a ruling six months ago.

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