Print PDF

EU Claims Compliance with WTO Aircraft Subsidy Ruling

Thursday, December 08, 2011
Sandler, Travis & Rosenberg Trade Report

The European Union declared recently that it is in full compliance with a World Trade Organization ruling against subsidies provided by European authorities to large civil aircraft manufacturer Airbus. The EU said it has “adopted a course of action that addresses all forms of adverse effects, all categories of subsidies and all models of Airbus aircraft” covered by the WTO ruling.

For example, the EU said it has secured repayment of member state financing loans (what the U.S. refers to as “launch aid”) and terminated MSF agreements, increased fees and lease payments on infrastructure support to accord with market principles, and ensured that capital contributions and regional aid subsidies have come to an end and are no longer capable of causing adverse effects. The EU asserted that this course of action affects Airbus’ A300, A310, A320, A330, A340 and A380 aircraft as well as derivatives thereof. The A350, which is expected to compete with Boeing’s next-generation 787, was not covered by the WTO case and is not included in this list.

U.S. Trade Representative Ron Kirk said the U.S. is reviewing the EU’s compliance notice. The WTO ruling “requires that the EU withdraw its subsidies or remove their adverse effects,” Kirk said, and the U.S. will determine its next steps based on a careful evaluation of whether the EU has in fact done so. If not, the U.S. could bring a compliance action against the EU at the WTO.

The WTO Appellate Body is expected to rule in a companion case against Boeing in early 2012. EU trade spokesman John Clancy said that at that point “the EU expects to receive an equally solid set of compliance actions from the United States.”

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines