Airbus aid dispute: EU, US talks in January

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The United States and the European Union will hold talks in January after Washington accused EU governments of failing to eliminate illegal subsidies to Airbus, trade officials said Thursday.

The US has threatened multi-billion dollar sanctions against the EU which it claims has failed to comply with a WTO ruling against subsidies to the aircraft maker and even provided it new aid.

The EU has accepted a US request for talks which are scheduled for "early January", officials said following a meeting of the Dispute Settlement Body (DSB) on Thursday.

If no agreement is reached Washington can then ask for a special panel to be established to review the EU's compliance package, submitted to the World Trade Organization on December 1.

The US is seeking permission to impose on the EU an estimated $7 billion to $10 billion (5.3 and 7.6 billion euros) in trade sanctions annually.

The request has been referred to arbitrators who according to WTO rules have 60 days to rule on the level of retaliation unless the process is suspended.

In June the DSB ruled that some subsidies, including launch aid to Airbus, had caused "serious prejudice" to US interests and gave the EU six months to end the unfair aid in the seven-year-old dispute.

A parallel EU complaint against US aid to Boeing is also wending its way through the WTO dispute process, with a possible ruling in February.

The cases were filed within an hour of each other in October 2004.

EU trade commissioner Karel De Gucht said last week that the European Union and the United States were "both guilty" in the affair as they had "both taken government action" to support their aircraft industries.

© 2011 AFP

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