EU threatens Boeing-Airbus subsidy war

5th October 2004, Comments 0 comments

PARIS, Oct 5 (AFP) - European Union trade commissioner Pascal Lamy warned Tuesday that the EU executive commission could challenge subsidies for Boeing's new passenger jet, the 7E7, if Washington continued to attack aid for Airbus.

PARIS, Oct 5 (AFP) - European Union trade commissioner Pascal Lamy warned Tuesday that the EU executive commission could challenge subsidies for Boeing's new passenger jet, the 7E7, if Washington continued to attack aid for Airbus.  

"I am ready for both systems," the outgoing trade commissioner said here.  

Either "we readjust the 1992 accord" regulating aid to Boeing and Airbus, or "we begin a case with the WTO (World Trade Organisation), but we will not take the initiative.  

"If the USA begins with Airbus, we will begin a case with the 7E7. And we are comfortable" with the chances of obtaining a favorable outcome, Lamy added.  

US officials have said they may file a complaint with the WTO if Brussels refuses to renegotiate a 1992 agreement that permits certain state subsidies to Airbus, a move which incoming EU trade commissioner Peter Mandelson said Monday he was keen to avoid.  

Lamy, who is to step down at the end of the month, said he believed the EU had no objection to considering a review of the 1992 agreement which permits certain subsidies to the world's two biggest aircraft manufacturers.  

He told journalists there is "no objection to looking at whether the accord... of '92 can be reviewed."  

Lamy said the EU, which has previously opposed a bid by the US to end subsidies, is "perfectly ready" to take on any such complaint from the US.  

Boeing and Washington argue that Airbus, which has overtaken Boeing in some markets, no longer needs subsidies, while EU officials counter that Boeing benefits from "indirect" US aid in the form of defence contracts.  

On Thursday, the EU and the United States moved a step closer to an aviation trade war after failing to reach agreement during talks in Washington.  

The US said it might now pursue a threat by President George W. Bush to take a case to the World Trade Organisation over the subsidies following talks between Lamy and US Trade Representative Robert Zoellick.  

Prospects for renegotiating the 1992 accord were now "dwindling" said European Commission spokesman in Washington, Anthony Gooch.  

"It actually now looks as if that would be quite difficult to achieve," added Gooch. "It is now looking like it's a very long shot."  

Zoellick said through a spokesman that "the status quo is unacceptable".   He said: "We believe a new agreement is needed that creates a level playing field and ends the unfair support that Airbus receives from launch aid."  

The EU spokesman said Europe would make an "immediate and prompt" response to a US complaint to the WTO.

© AFP

 

Subject: French News

 

 

 

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