WTO rules in favor of US over Airbus
09-04-2009, 12:29 PM
#1
Che Guevara
Thread Starter
Joined APC: Aug 2005
Posts: 6,408
WTO rules in favor of US over Airbus
WTO rules for US in case over Airbus subsidies - Yahoo! Finance
ap
WTO rules for US in case over Airbus subsidies
Rep. Dicks: WTO rules Airbus received illegal subsidies in trade dispute with US
Washington state's Norm Dicks, who was briefed by U.S. trade officials of the confidential decision, said the WTO ruling confirms a complaint by the U.S. in 2004 that shows "all Airbus aircraft have received illegal subsidies and that these have caused material harm to Boeing."
The WTO handed its interim ruling to the U.S. and European Union, but didn't reveal the results partly because of the sensitive company information contained in it. Both Washington and Brussels confirmed they received the ruling.
Lutz Guellner, spokesman for the European trade commissioner, said, "It is a long document of more than 1,000 pages which we will study carefully."
In its suit, the U.S. claimed government subsidies for Airbus created unfair competition in a market worth $3 trillion over the next two decades. The ruling could set important precedents on how far governments can go to support the aviation industry.
The EU is likely to appeal and the companies must wait for a decision next year in an Airbus challenge to what it sees as unfair U.S. government support for Chicago-based Boeing Co. Some observers said the complexity of the two cases makes it more likely the issue will be resolved by negotiations between the parties than by the WTO.
Wall Street analysts seemed neither surprised, nor disappointed by the WTO ruling. Wayne Plucker, manager of Frost & Sullivan's North American aerospace research, said well-developed areas like the U.S. and the EU "don't really need subsidies."
Still, Plucker said Airbus enjoys a clear advantage over Boeing because of the European subsidies, and while many other countries are using government support for fledging aviation businesses "because it's a great source of good jobs and high tech ventures ... eventually Airbus and Boeing need to compete on an even playing field."
The so-called launch aid were loans to Airbus that helped it develop new airplanes as it overtook Boeing as the world's top producer of commercial airplanes.
Secretary Treasurer of the International Federation of Professional and Technical Engineers, Paul Shearon, called on the U.S. government to require Airbus to divest itself from any illegal subsidies used to finance bids for government contracts, including its offer for a $35 billion aerial refueling tanker for the Air Force.
Airbus, whose parent company European Aeronautic Defense and Space Company N.V. is partnered with Northrop Grumman Corp., is competing against Boeing on the tanker deal.
Both Boeing and Los Angeles-based Northrop have been competing for years over the tanker contract that could surpass $100 billion over two decades.
Dicks, and other Washington state lawmakers who represent areas with Boeing jobs at stake, contend that the Pentagon should account for the WTO's decision as it picks a contractor for the deal.
Associated Press Writers Alexander G. Higgins in Geneva and Mike Obel in New York contributed to this report.
WTO rules for US in case over Airbus subsidies
Rep. Dicks: WTO rules Airbus received illegal subsidies in trade dispute with US
Washington state's Norm Dicks, who was briefed by U.S. trade officials of the confidential decision, said the WTO ruling confirms a complaint by the U.S. in 2004 that shows "all Airbus aircraft have received illegal subsidies and that these have caused material harm to Boeing."
The WTO handed its interim ruling to the U.S. and European Union, but didn't reveal the results partly because of the sensitive company information contained in it. Both Washington and Brussels confirmed they received the ruling.
Lutz Guellner, spokesman for the European trade commissioner, said, "It is a long document of more than 1,000 pages which we will study carefully."
In its suit, the U.S. claimed government subsidies for Airbus created unfair competition in a market worth $3 trillion over the next two decades. The ruling could set important precedents on how far governments can go to support the aviation industry.
The EU is likely to appeal and the companies must wait for a decision next year in an Airbus challenge to what it sees as unfair U.S. government support for Chicago-based Boeing Co. Some observers said the complexity of the two cases makes it more likely the issue will be resolved by negotiations between the parties than by the WTO.
Wall Street analysts seemed neither surprised, nor disappointed by the WTO ruling. Wayne Plucker, manager of Frost & Sullivan's North American aerospace research, said well-developed areas like the U.S. and the EU "don't really need subsidies."
Still, Plucker said Airbus enjoys a clear advantage over Boeing because of the European subsidies, and while many other countries are using government support for fledging aviation businesses "because it's a great source of good jobs and high tech ventures ... eventually Airbus and Boeing need to compete on an even playing field."
The so-called launch aid were loans to Airbus that helped it develop new airplanes as it overtook Boeing as the world's top producer of commercial airplanes.
Secretary Treasurer of the International Federation of Professional and Technical Engineers, Paul Shearon, called on the U.S. government to require Airbus to divest itself from any illegal subsidies used to finance bids for government contracts, including its offer for a $35 billion aerial refueling tanker for the Air Force.
Airbus, whose parent company European Aeronautic Defense and Space Company N.V. is partnered with Northrop Grumman Corp., is competing against Boeing on the tanker deal.
Both Boeing and Los Angeles-based Northrop have been competing for years over the tanker contract that could surpass $100 billion over two decades.
Dicks, and other Washington state lawmakers who represent areas with Boeing jobs at stake, contend that the Pentagon should account for the WTO's decision as it picks a contractor for the deal.
Associated Press Writers Alexander G. Higgins in Geneva and Mike Obel in New York contributed to this report.
09-04-2009, 02:27 PM
#2
Gets Weekends Off
Joined APC: Feb 2008
Position: 737 Captain
Posts: 855
Originally Posted by ToiletDuck
09-05-2009, 04:54 PM
#3
Gets Weekends Off
Joined APC: Mar 2006
Posts: 3,333
Partial US victory on Airbus funds
Partial US victory on Airbus funds
By Financial Times reporters
Published: September 4 2009 21:04 | Last updated: September 5 2009 01:02
The World Trade Organisation has handed a partial victory to the US in a preliminary ruling on its claim that billions of dollars in European government loans to Airbus constitute illegal subsidies.
Roughly two-thirds of the claims against government aid to Airbus have been dismissed, according to several people with knowledge of the ruling.
The WTO found that some of the €3bn ($4.3bn) in repayable launch aid for the A380, the world’s biggest passenger jet, was tantamount to subsidies as was funding for research, development and infrastructure. But the panel noted that repayable launch aid can be a viable option for financing aircraft. This will be seen in Europe as a victory.
One European said: “The draft report has dismissed 70 per cent of US claims about alleged EU subsidies to Airbus. It has also confirmed that repayable launch aid is a permissable way to partner governments.”
Aid to the new A350 wide-bodied jet being developed by Airbus – the rival to Boeing’s Dreamliner – was too recent to be included.
Still, people familiar with the US position said the WTO was unequivocal in its ruling that launch aid for the A380 constituted a subsidy. They disputed the signficance of the dismissal of individual claims, terming the WTO action “a direct rebuke to decades of launch aid to Airbus”.
Maria Cantwell, Democratic senator for Washington, Boeing’s home state, called the decision a “great day” for the company. “When finalised, this long-awaited ruling will help restore true competition in the commercial aviation market, and I applaud the WTO’s decision that government subsidies of Airbus are illegal,” she said.
The 1,000-page interim report, which is supposed to be confidential, was given to US and European Union trade diplomats in Geneva on Friday afternoon. The final report will not be published for several months.
The US filed a WTO complaint in October 2004 challenging $15bn in loans by the French, British, German and Spanish governments for development of the A380 and other aircraft dating back to 1970.
European insiders said the EU was likely to wait for the WTO’s ruling on Europe’s challenge to US subsidies for Boeing before reacting. This alleges that Boeing has received subsidies of $24bn over the years through federal defence and space contracts and state tax breaks. An initial ruling is expected in seven months. Boeing has denied receiving illegal subsidies.
Lutz Guellner, EU trade spokesman, said: “It is important to recall that this report is only half of the story and must be read with an interim report on the EU case against the US over aid to Boeing.”
Airbus said a definitive verdict in the legal process, including appeals, could take another four years.
By Financial Times reporters
Published: September 4 2009 21:04 | Last updated: September 5 2009 01:02
The World Trade Organisation has handed a partial victory to the US in a preliminary ruling on its claim that billions of dollars in European government loans to Airbus constitute illegal subsidies.
Roughly two-thirds of the claims against government aid to Airbus have been dismissed, according to several people with knowledge of the ruling.
The WTO found that some of the €3bn ($4.3bn) in repayable launch aid for the A380, the world’s biggest passenger jet, was tantamount to subsidies as was funding for research, development and infrastructure. But the panel noted that repayable launch aid can be a viable option for financing aircraft. This will be seen in Europe as a victory.
One European said: “The draft report has dismissed 70 per cent of US claims about alleged EU subsidies to Airbus. It has also confirmed that repayable launch aid is a permissable way to partner governments.”
Aid to the new A350 wide-bodied jet being developed by Airbus – the rival to Boeing’s Dreamliner – was too recent to be included.
Still, people familiar with the US position said the WTO was unequivocal in its ruling that launch aid for the A380 constituted a subsidy. They disputed the signficance of the dismissal of individual claims, terming the WTO action “a direct rebuke to decades of launch aid to Airbus”.
Maria Cantwell, Democratic senator for Washington, Boeing’s home state, called the decision a “great day” for the company. “When finalised, this long-awaited ruling will help restore true competition in the commercial aviation market, and I applaud the WTO’s decision that government subsidies of Airbus are illegal,” she said.
The 1,000-page interim report, which is supposed to be confidential, was given to US and European Union trade diplomats in Geneva on Friday afternoon. The final report will not be published for several months.
The US filed a WTO complaint in October 2004 challenging $15bn in loans by the French, British, German and Spanish governments for development of the A380 and other aircraft dating back to 1970.
European insiders said the EU was likely to wait for the WTO’s ruling on Europe’s challenge to US subsidies for Boeing before reacting. This alleges that Boeing has received subsidies of $24bn over the years through federal defence and space contracts and state tax breaks. An initial ruling is expected in seven months. Boeing has denied receiving illegal subsidies.
Lutz Guellner, EU trade spokesman, said: “It is important to recall that this report is only half of the story and must be read with an interim report on the EU case against the US over aid to Boeing.”
Airbus said a definitive verdict in the legal process, including appeals, could take another four years.
09-06-2009, 05:46 PM
#4
Gets Weekends Off
Joined APC: Dec 2008
Posts: 299
On the local news (KING5 & KOMO) they mentioned that Washington state also subsidized the 787 (something Airbus reponds with). However, they (the state) said they would have given breaks/subsidies to Airbus if they would have setup manufacturing in WA.
A US state saying "oh, if you would have setup shop here, we would have given you breaks, too" I don't think it makes it right, either.
A US state saying "oh, if you would have setup shop here, we would have given you breaks, too" I don't think it makes it right, either.
09-08-2009, 01:06 AM
#5
Gets Weekends Off
Joined APC: Mar 2006
Posts: 3,333
Originally Posted by tortue
... A US state saying "oh, if you would have setup shop here, we would have given you breaks, too" I don't think it makes it right, either.
Thread
Thread Starter
Forum
Replies
Last Post
