EU asks WTO to certify it has removed Airbus subsidies

The European Union has asked the World Trade Organization to certify that it has complied with WTO rulings on its subsidies for planemaker Airbus, attempting to forestall billions of dollars of US sanctions, a document published by the WTO showed on Monday. The legal move is the latest step in a 14-year-old trade dispute between the EU and the United States over funding for Airbus and its US rival Boeing.

In May the WTO appeals body ruled that the EU had failed to remove subsidized government development loans for the world’s largest airliner, the A380, and Europe’s newest long-haul jet, the A350, causing losses for Boeing BA.N and US aerospace workers.

That opened the way for U.S. retaliatory trade sanctions, subject only to a decision by a WTO arbitrator about how big those sanctions should be, which is still pending.

Boeing says Airbus received illegal aid worth $22 billion, including $18 billion in loans from governments. Of these, $9 billion is involved in the outstanding A350 and A380 claims. Airbus disputes those numbers, saying they overstate the amount of support embedded in the contested loans. It has meanwhile leveled significant subsidy claims against Boeing.

In the latest legal move, the EU said it had informed the WTO in May that it had withdrawn all remaining subsidies and taken appropriate steps to remove their adverse effects, and it wanted a legal ruling to that effect. Such a legal ruling would remove the basis for U.S. sanctions.

“The legal basis for this request is that... these measures have resulted in the European Union achieving full compliance, by (i) withdrawing the remaining subsidies, and/or (ii) taking appropriate steps to remove their adverse effects,” the EU said.

“By taking appropriate steps to bring the measures at issue into conformity with the European Union’s WTO obligations... (the EU) has consequently eliminated any nullification or impairment attributable to non-compliance with those recommendations and rulings.”

 

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