By Erik Wasson - 12/12/11 04:07 PM EST
The Aerospace Industries Association of America (AIA) on Monday hailed a move by the U.S. Trade Representative to reopen the U.S. case in the World Trade Organization against the European Union over subsidies to Airbus.
The association signaled the decision to examine whether EU member states have complied with a past WTO ruling is also important for setting precedents for new entrants into large civil aircraft market such as Canada and China.
“This process should result in the ending of non-compliant launch aid for aircraft production—loans provided by European governments that substantially reduce the business risk of introducing new-model airplanes,” AIA said in a statement.
“At the end of the day, it is critical for WTO member countries developing, or considering developing, civil aviation products to operate according to free and fair trade principles for the health, stability and growth of our industry,” the group said.
Boeing and Airbus have been feuding for decades over subsidies, and the WTO has found that Airbus benefited from illegally structured launch aid loans while Boeing benefited from U.S. government contracts in a way that made the contracts illegal subsidies to Boeing’s civilian aircraft business.
The aircraft disputes are the largest trade cases in WTO history and a source of tension between Europe and the United States.
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.