US claims “definitive victory” in Airbus subsidy case

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The World Trade Organization appellate body has given the United States a “definitive victory” in its long-running case against European subsidies for Airbus, said US officials.

The panel found that Airbus had received US$18 billion in WTO-inconsistent subsidies that “have caused harm to our industry over the last 20 years,” Tim Reif, general counsel for the US Trade Representative’s office, told reporters in a teleconference in Washington, Reuters reports.

The panel ruling, which still faces formal ratification by the WTO’s dispute settlement body, requires European governments to withdraw subsidies given to Airbus or eliminate their adverse effects within 180 days, he said.
“This report confirms for decades the European Union and its member states, France, Germany, Spain and the United Kingdom, have provided massive amounts of market-distorting launch aid and other subsidies that are inconsistent with WTO rules,” he said.

The United States lost on some issues in the appeal, but said on the whole “we’re enormously pleased with these findings,” Reif said. “This definitive victory will benefit American aerospace workers, who for decades have had to compete against a heavily subsidized Airbus.
“We expect the European Union and the Airbus governments to refrain from future launch aid disbursements,” Reif said, in reference to European plans to provide more aid for Airbus’ latest project, the A350.

The ruling came as US Trade Representative Ron Kirk was headed to Montana for a trade ministers meeting.

Airbus Chief Executive Tom Enders also declared victory in the long-running spat, saying the appeals decision gave a green light to “public-private partnership instruments” offered by European governments to help Airbus develop civil aircraft.
“This is a big win for Europe. We are pleased with the results,” Enders said in a statement released in Paris.

Reif acknowledged that the United States was unable to prove that launch aid itself was a subsidy “program.”

But he said the panel found that low interest rates and other favorable terms provided to Airbus under launch aid were illegal subsidies.

US officials said the requirement that European governments withdraw the subsidies or eliminate their adverse effects has implications for the A380 superjumbo jet, on which Airbus still has billions of dollars in loans to repay.



Reif said the United States would ask for the WTO dispute settlement body to meet soon to adopt the ruling formally.