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Key elements of US trade dispute with EU over Airbus

Published on 30/06/2010

Here are the key elements of the complaint launched by the United States against the European Union at the WTO in 2004 over what Washington claims is unfair state support for aircraft giant Airbus.

The World Trade Organisation published its ruling on the case on Wednesday, after delivering it to both sides confidentially three months ago.

Washington’s complaint of breaches in world trade rules targets European measures affecting trade in large civil aircraft, including:

– State financing from France, Germany, Britain, Spain, known as “launch aid” for the development of Airbus airliners stretching back to the company’s very first A300 model, which was launched in 1972.

The United States argued that the aid financed projects “that would “otherwise not be commercially feasible.”

It also expressed concern about launch aid in more recent years for the A340 series and the A380 superjumbo, saying that they “appear to be export subsidies,” which are prohibited outright under WTO rules.

– Provision for financing from the European Investment Bank for several types of Airbus airliners as well as equity provided by government owned or controlled banks in France and Germany between 1987 and 1998.

– Public investments in Airbus plants in Germany, France, Britain and Spain as well as European Union or regional funds for research and development projects in civil aviation which Airbus took part in.

Overall, the United States has argued that the European measures were “specific subsidies… that are causing or threatening to cause injury to US industry.”

Washington said they impeded imports of large US civil airliners in world markets, including the 27 nation EU, by undercutting the price of US airliners, forcing down prices significantly and costing lost sales.

It gave no cost estimates in the complaint to the global trade watchdog, which was finalised on May 31, 2005.