US appeals against own win in Airbus aid row

The US has appealed against its own victory in a landmark trade ruling against European subsidies for plane maker Airbus.

The US has appealed against its own victory in a landmark trade ruling against European subsidies for plane maker Airbus.

It is asking the World Trade Organisation for tougher condemnation of the EU’s financial meddling in a market worth more than €2.4tn over the next two decades.

Details of the appeal were not immediately made public but US trade spokeswoman Nefeterius McPherson said yesterday Washington had joined Brussels in challenging findings from June’s 1,061-page verdict, which found that Airbus gained an unfair advantage over US competitor Boeing through low-interest loans worth billions, infrastructure provisions and research and development grants.

The EU blocked adoption of the decision with its appeal last month, putting off any talk of the 27-nation bloc speedily complying with WTO rules on loans and other payments to the France-based plane maker.

The WTO’s appellate body may not deliver its decision until 2012, giving European governments plenty of time to first see the results of their complaint that Boeing receives billions in back-door subsidies through Nasa and US Defence Department contracts.

The six-year-old dispute is moving with record slowness and the complicated tit-for-tat game of legal manoeuvring is delaying resolution of a transatlantic fight that has simmered for decades as Airbus climbed above Boeing to be the world’s number one plane manufacturer.

Airbus used billions of euros in low-interest government loans – commonly called “launch aid”-- to develop the A380 superjumbo and other planes. Boeing wants its rival to give the money back until repayments reach what they might have been if the lending took place at market rates.

Airbus’ immediate concerns are that it can roll out well-tried funding strategies for the development of its mid-size, long-haul A350 XWB – to compete against Boeing’s 787 – and that a conclusive judgment on illegal aid does not add a political hurdle to the bid by its parent company EADS for a £22.4-billion US air force contract for refuelling jets.

The EU’s appeal last month canvassed nearly the entire case against government support for Airbus, even as European officials insisted that the ruling was “mixed”.

In a case that covers dozens of claims and counterclaims, Washington may be appealing against the WTO’s rejection of a number of alleged instances of wrongdoing linked to older Airbus models.

The panel also ruled against US arguments that certain French payments amounted to export subsidies and that EU funding allowed Airbus to undercut Boeing prices.

The competing cases have arguably become even more important as new competitors from China and elsewhere emerge and will probably set industry-defining guidelines for government support in the civil aviation sector.

Most trade analysts expect the dispute to eventually be solved through negotiations, even if the WTO can authorise retaliatory sanctions against countries that refuse to comply with rulings. That would still take years of litigation.

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