With Europe’s traditional holiday period over, the Airbus-Boeing subsidies dispute is expected to pick up pace. While the World Trade Organisation (WTO) prepares to hear the rival subsidy cases, the US side expects European governments to come under increasing pressure to commit launch aid for the Airbus A350.
The two WTO panels that will rule on the subsidy cases brought by the USA and European Union are expected to be named this month. Three rounds of names have been presented without the EU and US negotiators reaching a consensus on the panellists, and US sources say either side can now ask the WTO director-general to appoint their three-person panel.
The two sides have also failed to agree over the so-called Annexe 5 procedure for gathering facts on each other’s subsidies. This has been blocked by the EU, which wants mutual agreement with the USA on the scope, timetable and facilitator for the process. Because of this, sources say the USA could ask its panel to begin deliberations without waiting for the Annexe 5 fact-gathering procedure.
The US side believes Airbus wants the European governments to commit to A350 launch aid before 6 October, the first anniversary of the US withdrawal from the 1992 agreement on subsidies for large commercial aircraft. The sources suspect the EU believes this will insulate the launch aid from a WTO ruling, but they say the USA will not accept this argument because it terminated the agreement for non-compliance, and did not have to give a year’s notice of withdrawal.
Reacting to press reports that the UK government is considering committing in principle to A350 launch aid this month, but not immediately releasing the funds, the US Trade Representative (USTR) warned: “Any commitment of funds, even if they are not formally disbursed, would signal the continuation of subsidies for the A350. It would be a step in the wrong direction.”
Airbus said in June it was delaying the industrial launch of the A350 to September to give the EU and USA more time to reach a settlement. “Negotiations will become much harder if the UK or any other EU member state commits subsidies to the A350,” said the USTR.
Airbus now says there is no date for official launch of the A350, for which it has 130 commitments. “It’s just a formality,” the company says. “We’ve been to the governments and explained our case and for the time being launch aid is still legal. We just want a level playing field and on our side everything is clear and transparent.”
GRAHAM WARWICK/WASHINGTON
Additional reporting by Julian Moxon
Source: Flight International
