US takes EU to WTO again over aircraft subsidies

Any hopes that the Boeing-Airbus feud at the World Trade Organization over illegal aircraft subsidies had come to a conclusion were dashed once again on Friday when the U.S. again took the EU to court. 

The aircraft disputes are the largest trade cases in WTO history and a significant source of tension between Europe and the United States.

The WTO has, in dueling cases, found both sides have provided subsidies in ways that broke its rules.

The EU on Dec. 1 claimed that it had come fully into compliance with a WTO ruling that EU member states had provided illegal aid to Airbus.

On Friday the U.S. challenged that claim and set in motion talks that can ultimately lead to the formation of a WTO compliance panel to investigate the EU claims. That process could lead to trade sanctions on the EU.

“The United States has reviewed carefully the limited information in that notification. It appears to show that the EU has not withdrawn the subsidies in question and has, in fact, granted new subsidies to Airbus’s development and production of large civil aircraft,” a press release from the office of U.S. Trade Representative said.

The U.S. and Boeing want to use the WTO ruling to ensure that EU member states cannot finance future planes like the A350 in the manner they have subsidized earlier models. The WTO language is tricky on this aspect since under one interpretation it only applies to ending past subsidies. 

“Our action today underscores what we have said all along — that the United States cannot accept anything less than an end to this subsidized financing. The United States remains prepared to engage in any meaningful efforts, through formal consultations and otherwise, that will lead to the goal of ending subsidized financing at the earliest possible date,” U.S. Trade Representative Ron Kirk said in a statement.

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