US reopens Airbus case with WTO

BBC ^ | May 30, 2005

[Righty_McRight]

The United States says it will reactivate a World Trade Organization (WTO) case against European Union subsidies for aircraft maker Airbus. US trade officials said the decision followed the failure of latest efforts to reach a negotiated settlement.

Earlier on Monday, Europe made a new offer to the US to cut state aid to help resolve the long-running row.

Trade commissioner Peter Mandelson proposed that both sides cut part of their subsidies to Airbus and Boeing.

Mr Mandelson suggested both sides then discuss further aid cuts later.

According to one report, Brussels has offered to cut aid for the Airbus A350 mid-sized jet by up to 30%.

The A350 project is supposed to cost $3bn, some one-third of which is likely to have to come from European governments.

'Disappointing'

In response to Mr Mandelson's proposal, the US accused Brussels of "spinning to the press" and said neither side was supposed to be making their proposals public.

Brussels and Washington have been in talks since January on the issue.

Each side has accused the other of distorting the world market for aircraft by unfairly supporting their national manufacturers.

But, until now, the row has not been taken to the WTO.

The US said it had decided to proceed with the WTO case in light of preparations by the EU to commit $1.7bn in new launch aid to Airbus.

"The EU's insistence on moving forward with new launch aid is forcing our hand," said US trade representative Rob Portman.

Despite the latest development the EU has not yet announced a resumption of its case against Boeing.

"This is a disappointing move by the United States given the proposals for a negotiated solution the EU side made on Friday," said European Commission spokeswoman Claude Veron-Reville.

"The EU will make its own position known tomorrow."

[Fractal Trader]

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