The USA and Europe are on course for a head-on clash over the A3XX programme. Washington is demanding details of German and UK funding arrangements for the product within days of the Airbus board being given authority to offer (ATO) the ultra-large airliner to potential customers.
US trade representative Charlene Barshefsky says the two European nations have been asked to hand over details of proposed subsidies so that it can ascertain whether they comply with World Trade Organisation (WTO) rules.
The pair believe the grants are legal under the Large Civil Airliner (LCA) agreement between the USA and European Union in 1992 - an accord the USA wants to rewrite, but which the European Commission says still stands. "We have an agreement with the USA on large aircraft subsidies that is still in force," says the EC's enterprise directorate, responsible for government support to industry.
A3XX development costs are expected to total $10-$12 billion, up to 33% of which, the LCA agreement says, may come from partner governments as reimbursable loans. This aid is repayable over 17 years at or above the cost of government borrowing.
The WTO has its own complex rules limiting industrial subsidies, although the EC says the 1992 bilateral was negotiated outside these rules, since it allows full reimbursement rather than state aid.
The WTO says the USA "expressed concern" about A3XXfunding even before the ATO decision, using a 14 June civil aircraft committee meeting in Geneva to highlight Airbus' success in securing a 50% share of civil airliner orders last year - and suggesting that this called the 1992 agreement into doubt.
The bilateral was drawn up when Airbus lagged way behind Boeing, and US defence spending was a huge boost to research and development.
Source: Flight International