WTO verdict shows US harm with aircraft aid: EU

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The EU claimed on Monday that a WTO probe had shown that its aircraft industry was harmed by US aid for Boeing, after the trade body delivered a ruling on the transatlantic battle over multibillion dollar subsidies.

A source close to the World Trade Organization confirmed that the report on the European Union's complaint against the United States "was sent to the parties."

Under the Geneva based trade body's rules, both sides are meant to keep the full ruling confidential for about three more months.

The handover marked the latest episode in seven year long tit-for-tat battle between Washington and the 27-nation European bloc over subsidies or state aid for the world's two biggest civil aircraft makers.

Airbus estimated Monday that it had suffered at least 45 billion dollars in lost sales, claiming the latest verdict confirmed that arch rival Boeing received "massive and illegal government subsidies for many decades".

EU trade spokesman John Clancy said: "We welcome the WTO Panel's confirmation of its initial findings regarding the support provided to Boeing by the US government."

"This solid report sheds further light on the negative consequences for the EU industry of these US subsidies and provides a timely element of balance in this long-running dispute," he added in a statement.

The handover followed another public ruling last June that partially upheld a parallel US complaint on 18 billion dollars (13.1 billion euros) in subsidies for Airbus.

The WTO is already hearing appeals lodged by both sides in that case.

The world's two biggest aircraft makers have been engaged in a bruising public relations battle on the sidelines of the dispute, trading verbal blows each step of the way.

Boeing last week rejected Airbus's "compensation" figure as "simply ridiculous, although vice president for trade policy Ted Austell acknowledged that the interim findings delivered in September did show that some US support breached the rulebook.

However, the amounts are disputed.

A key issue in the EU complaint is state support for Boeing's military aerospace research and development, and its impact on civil aircraft production.

Trade insiders believe that the WTO arbitrators faulted both sides to varying degrees, and would prompt a renewed round of appeals from the United States and EU.

"Both sides continue to see exactly what they want to see," said Richard Aboulafia, a vice president at Teal Group analysts.

"Even if there are concrete WTO rulings that demand an end to certain types of subsidies, all the defending country needs to do is change their type or method of support."

"But they will still provide the level of support they want to provide," he added.

Not all subsidies or public aid are illegal under WTO rules, which seek to stop those distorting international trade.

© 2011 AFP

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