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Tuesday, May 29, 2018, 15:32
US and EU again at odds over Airbus subsidies at WTO
By Reuters
Tuesday, May 29, 2018, 15:32 By Reuters

This photo shows a view of an Airbus A350-900 arriving at Arturo Merino Benitez Airport, April 01, 2018. (MARTIN BERNETTI / AFP)

GENEVA - The European Union told the World Trade Organization's dispute settlement body on Monday that it had acted within days of a WTO ruling to bring its funding of planemaker Airbus into line with WTO rules, a trade official who attended the meeting said.

The United States won a partial victory on May 15 against EU support for Airbus at the WTO, clearing the way for possible US sanctions in a 14-year-old dispute over claims of illegal handouts for aircraft makers.

The EU said last week it had taken steps to comply with the WTO ruling on subsidies for its funding for A350, Europe's newest long-haul jet, and the A380, the world's largest airliner, and reiterated its efforts at a closed-door WTO meeting on Monday.

The US is the target of a similar WTO complaint brought by the EU over US support for Boeing, and the EU has said it expects to land a similar legal blow later this year, a move which could plunge the two sides into a tit-for-tat sanctions battle

The EU said it had made "contractual changes to the loan terms for the A380 and the A350 XWB models of aircraft, where it was found that the repayable loans provided to Airbus for these aircrafts did not sufficiently reflect market conditions."

READ MORE: EU 'doesn't support measures that run counter to WTO law'

But a US representative at the WTO meeting said it was hard to give credence to the EU's assertion, after four previous rulings that had disagreed with similar EU claims to bring Airbus's financing into line with market benchmarks.

Under WTO rules, Washington could now ask the WTO to set a level of sanctions allowed against the EU.

"To be clear, the US preferred outcome is a mutually agreed solution with respect to aircraft financing," the US official told the meeting. "The United States remains ready to hold serious discussions to achieve this goal."

The United States is the target of a similar WTO complaint brought by the EU over US support for Airbus's rival Boeing, and the EU has said it expects to land a similar legal blow later this year.

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That could plunge the two sides into a tit-for-tat sanctions battle, or prompt what some trade experts have long expected: a trans-Atlantic deal on financing big civil aircraft.

The US official said Washington wanted to agree a deal to avoid similar disputes over subsidies in future, although it was prepared to seek countermeasures on EU products if necessary.

"But in our view, what is needed to resolve this dispute is not more a WTO litigation but a real desire to resolve this dispute," the US official said.

READ MORE: WTO chief urges global cooperation to ease trade tensions

An Airbus spokeswoman said the firm welcomed the US proposal for a settlement, saying it would be a "wise way forward" and dismissed any grounds for US countermeasures.

“Airbus and the EU have always been open to sit down and discuss a settlement with everything on the table and without any preconditions," she said.

"If that is the case, we are happy to start a constructive discussion to find a solution to this long lasting dispute."

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