Airbus dispute: December 1 deadline for EU response

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The EU will say on Thursday how it intends to comply with a WTO ruling against subsidies paid by Brussels to aviation giant Airbus in the latest stage of a long-running dispute with the United States.

The World Trade Organisation gave the European Union until December 1 to comply after it found some subsidies provided by Brussels caused "serious prejudice" to United States' interests.

"We have always said that we would honour our WTO obligations and comply fully and on time," said John Clancy, EU Trade spokesman.

"We have been working with the governments of France, Germany, Spain and UK, as well as with Airbus, on a series of steps that achieves just that.

"We will issue a public document that describes how we have achieved compliance on 1 December and transmit it to the WTO and the US."

In May a WTO appeal body upheld findings that some subsidies, including launch aid provided by Brussels, were incompatible with a specific agreement and had threatened US interests.

It also reversed a key finding that financing by Germany, Spain and Britain for the development of the A380 superjumbo amounted to an export subsidy, prompting both sides to claim victory.

The WTO findings were adopted by the Dispute Settlement Body (DSB) dealing with the case on June 1 and the EU was given six months to report back on how it intended to implement its rulings.

Any comment from the WTO is not expected before December 19 when a DSB session is scheduled.

US aircraft maker Boeing said it believes Airbus has benefited from 18 billion euros of illegal subsidies, a figure dismissed as fantasy by the EU.

The company said the EU was continuing to subsidise Airbus despite the June 1 decision by making 3.3 billion euros available for its competitor for the development of its A350 craft.

The seven-year tit-for-tat dispute over state aid is far from over, with a parallel case brought by the EU against US subsidies for Boeing still ongoing.

It remains to be seen whether the EU's compliance proposal satisfies the US and vice-versa.

"This will be a substantial package," said Clancy.

"We expect that we receive an equally solid set of compliance measures from the United States once the WTO has finally ruled on subsidies to Boeing," he said.

© 2011 AFP

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