WTO at war with EU as Brussels fails to stop millions in subsidies that are destroying US
THE EUROPEAN Union failed to rein in £1.5 billion in subsidies to planemaker Airbus, the World Trade Organisation said today.
Transatlantic complaints about aircraft subsidies make up the world's largest trade dispute
The ruling is part of a series of tit-for-tat transatlantic complaints about aircraft subsidies that together make up the world's largest trade dispute, still raging after 12 years of bitter arguments.
Airbus loans were a cause of significant lost sales for its US competitor Boeing
We expect the EU, Germany, France, the United Kingdom, and Spain - some of our closest trading partners - to respect WTO rules
The WTO said the EU had failed to comply with earlier rulings by the global trade body against all but two of 36 contested measures, including billions of dollars of European government loans to Airbus stretching back decades.
The loans were a "genuine and substantial" cause of significant lost sales for its US competitor Boeing, it said.
Michael Froman said the subsidies had cost US workers exports worth tens of billions of dollars
In a blow to Europe's long-held argument that the most recent Airbus plane, the A350, fell outside the case, the WTO said funding for the jet had been subsidised but rejected US claims it fell into the most toxic category of "prohibited" aid.
The US claimed Airbus had failed to undo subsidies worth £16 million ($22 billion), including £1.5 million ($4 billion) for the A350.
European industry officials dispute those numbers, saying they overstate the amount of support at stake within the loans.
US Trade Representative Michael Froman said the subsidies had cost US workers exports worth tens of billions of dollars.
The US claimed Airbus had failed to undo subsidies worth £16 million
He said in a statement: "We expect the EU, Germany, France, the United Kingdom, and Spain - some of our closest trading partners - to respect WTO rules.
"We call on them to end subsidized financing of Airbus immediately."
The EU, however, suggested it would appeal the latest findings, saying it found some of the report "unsatisfactory".
The European Commission said, adding the 574-page document should be read in the context of two other WTO reports expected to address US subsidies to Boeing in coming months: "We are closely analysing the report."
It comes amid a US presidential campaign where claims that US companies are suffering from alleged cheating by foreign competitors is a prime topic for both candidates, and amid growing support for protectionism on both sides of the Atlantic.
Airbus and Boeing face order challenges
In earlier findings, the WTO ruled that both Airbus and Boeing received unfair subsidies worth billions of dollars.
Both sides have sought WTO permission to draw up sanctions that could penalise other industries, with the US calling for up to £7 billion ($10 billion) in counter-measures and the EU £9 billion ($12 billion).
But no reprisals are expected until the WTO process, which is already running about three years behind schedule, has been exhausted, which trade sources say could take months or years.
Many analysts expect a negotiated settlement instead.