A fresh trade dispute has broken out between the US and the European Union, this time over the subsidies that the two sides pay to the aircraft industry.
The US claims that the financial support European governments provide to aircraft maker Airbus is in breach of world trade rules, while the EU says the same is true of Washington’s subsidies for Boeing.
While transatlantic trade disputes are nothing new, this latest spat threatens to put all previous ones in the shade. BBC News Online takes a closer look.
How did this row start?
The US and the EU have been sniping away at each other for years on this issue, although outright hostilities have until now been held in check by a 1992 agreement between the two sides setting limits on aircraft subsidies.
Matters took a turn for the worse on Wednesday when the US tore up the 1992 agreement, and made a formal complaint to the World Trade Organisation over the EU’s support for Airbus.
The EU, not to be outdone, responded by filing its own complaint over the financial assistance the US government provides to Boeing.
Each side claims that the other has breached the terms of the now-defunct deal on subsidies.
How much money are we talking about?
The US claims Airbus has received the equivalent of $40bn (£22.4bn; 32bn euros) in subsidies since its inception in 1967, mostly in the form of government loans with advantageous repayment terms.
The EU says Boeing has pocketed some $18bn in direct and indirect subsidies since 1992, including a $3.2bn tax break from the authorities in Washington state, where the firm has assembly operations.
Why has the battle broken out at this particular time?
There are several factors that have brought matters to a head.
Airbus, after years of playing second fiddle to Boeing, has recently started to outpace its old rival.
The European company sold more passenger jets than Boeing for the first time ever last year.
The US says this demonstrates that the traditional justification for Airbus’ subsidies – that it is a young company struggling to compete in a cut-throat industry – is no longer valid.
The EU retorts that Airbus’ success reflects a steady decline at Boeing rather than regular injections of public money.
Secondly, Airbus and Boeing are both gearing up for the launch of new super sized passenger jets – Boeing’s 7E7 “Dreamliner” and Airbus’ A380 super jumbo – and their success is critical to both companies’ future performance.
Each side claims that a large chunk of the other’s subsidies has been channelled towards developing these new-generation aircraft.
Finally, there is the US presidential election, now less than a month away, to consider.
The EU has claimed that Washington’s complaint to the WTO is a politically-motivated attempt to make President George W Bush look tough on trade ahead of the poll, although US officials have vehemently denied this.
What happens now?
Under WTO rules, the EU and the US now have 60 days to settle their differences amicably before formal dispute resolution procedures kick in.
However, the size and complexity of the case has raised questions over whether WTO is equipped to handle it.
Under normal circumstances, the winning side in a WTO dispute is entitled to impose trade sanctions on the loser unless it abandons the practices that gave rise to the dispute.
In the worst case scenario, the EU and the US would both win, paving the way for a ferocious round of two-way sanctions which could seriously dent transatlantic trade, harming the European and American economies.
link taken from : http://news.bbc.co.uk/1/hi/business/3722888.stm
By: beistrich - 10th October 2004 at 16:26
No I trust the information presented at a news conference that is not from Boeing PR.
A Boeing press conference is Boeing PR
By: beistrich - 10th October 2004 at 16:26
No I trust the information presented at a news conference that is not from Boeing PR.
A Boeing press conference is Boeing PR
By: Grey Area - 10th October 2004 at 14:37
The fact that you can present a Boeing press conference – the one you mentioned in your first posting on this thread – as a source of objective fact in this matter tells the rest of us all we need to know about how seriously we should take your subsequent postings on this issue. :rolleyes:
By: Grey Area - 10th October 2004 at 14:37
The fact that you can present a Boeing press conference – the one you mentioned in your first posting on this thread – as a source of objective fact in this matter tells the rest of us all we need to know about how seriously we should take your subsequent postings on this issue. :rolleyes:
By: Bmused55 - 10th October 2004 at 14:31
Thats a fact. But i think you will trust the Boeing PR
No I trust the information presented at a news conference that is not from Boeing PR.
In fact no, I am not trusting anything. I’m reading anything presented about this “problem” and like everyone waiting for the resolution, whatever it may be
By: Bmused55 - 10th October 2004 at 14:31
Thats a fact. But i think you will trust the Boeing PR
No I trust the information presented at a news conference that is not from Boeing PR.
In fact no, I am not trusting anything. I’m reading anything presented about this “problem” and like everyone waiting for the resolution, whatever it may be
By: beistrich - 10th October 2004 at 14:25
i.e. 7E7 is good for all concerned economies just as the 380 and other Airbus products are multi-national diverse and produce jobs for everyone,
right
Ok, lets see you back up your claims of illegal subsidies.
Prove it.
Well the Airbus subsidies, as i say before, are legal. (wto rule from 1992) Thats a fact. But i think you will trust the Boeing PR
This thread is now producing considerably more heat than light. Let’s all just wait and see what the WTO makes of the whole sorry mess, eh?
This would be a long time
The USA and EU have 60 days time to find a solution. Maybe the US would be not longer interest in this when the election is over. Who knows? After the 60days the WTO would need a months.
By: beistrich - 10th October 2004 at 14:25
i.e. 7E7 is good for all concerned economies just as the 380 and other Airbus products are multi-national diverse and produce jobs for everyone,
right
Ok, lets see you back up your claims of illegal subsidies.
Prove it.
Well the Airbus subsidies, as i say before, are legal. (wto rule from 1992) Thats a fact. But i think you will trust the Boeing PR
This thread is now producing considerably more heat than light. Let’s all just wait and see what the WTO makes of the whole sorry mess, eh?
This would be a long time
The USA and EU have 60 days time to find a solution. Maybe the US would be not longer interest in this when the election is over. Who knows? After the 60days the WTO would need a months.
By: Grey Area - 10th October 2004 at 13:28
Quote:
“Originally Posted by beistrich
I post in this thread and you answer with a stupid insult.I know you have a proplem with airbus(call it childish or stupid) but answer in a civil-manner (like grey area say it)
Its normaly that the Union (and the States too) support the Industry with loans. Good for the Economics. The Airbus-loans are legal and like the other times they will pay it back. But are the Boeing loans legal? Maybe the lawers or the WTO will tell it to us. “
Ok, lets see you back up your claims of illegal subsidies.
Prove it.
That was a question, not a statement. The question mark was a bit of a giveaway in that respect. It isn’t necessary to prove or to disprove a question.
This thread is now producing considerably more heat than light. Let’s all just wait and see what the WTO makes of the whole sorry mess, eh?
Well said, by the way, ELP.
By: Grey Area - 10th October 2004 at 13:28
Quote:
“Originally Posted by beistrich
I post in this thread and you answer with a stupid insult.I know you have a proplem with airbus(call it childish or stupid) but answer in a civil-manner (like grey area say it)
Its normaly that the Union (and the States too) support the Industry with loans. Good for the Economics. The Airbus-loans are legal and like the other times they will pay it back. But are the Boeing loans legal? Maybe the lawers or the WTO will tell it to us. “
Ok, lets see you back up your claims of illegal subsidies.
Prove it.
That was a question, not a statement. The question mark was a bit of a giveaway in that respect. It isn’t necessary to prove or to disprove a question.
This thread is now producing considerably more heat than light. Let’s all just wait and see what the WTO makes of the whole sorry mess, eh?
Well said, by the way, ELP.
By: Bmused55 - 10th October 2004 at 10:53
I post in this thread and you answer with a stupid insult.
I know you have a proplem with airbus(call it childish or stupid) but answer in a civil-manner (like grey area say it)
Its normaly that the Union (and the States too) support the Industry with loans. Good for the Economics. The Airbus-loans are legal and like the other times they will pay it back. But are the Boeing loans legal? Maybe the lawers or the WTO will tell it to us.
Ok, lets see you back up your claims of illegal subsidies.
Prove it.
By: Bmused55 - 10th October 2004 at 10:53
I post in this thread and you answer with a stupid insult.
I know you have a proplem with airbus(call it childish or stupid) but answer in a civil-manner (like grey area say it)
Its normaly that the Union (and the States too) support the Industry with loans. Good for the Economics. The Airbus-loans are legal and like the other times they will pay it back. But are the Boeing loans legal? Maybe the lawers or the WTO will tell it to us.
Ok, lets see you back up your claims of illegal subsidies.
Prove it.
By: ELP - 10th October 2004 at 10:21
What is funny is that not much of the 7E7 is “U.S. made”. It is a multi-national setup. 35% Boeing, 35% Japanese companies, 26% Vought/Alenia. Another 4% ?
Vertical Fin – Boeing ( Frederickson )
Wings Movable Trailing Edge – Boeing ( Australia )
Nose – Boeing ( Wichita)
Wing-to-body fairing – Boeing ( Canada )
Wing leading edge devices – Boeing ( Tulsa )
Wings – Mitsubishi / Kawasaki / Fuji ( Japan )
Fuselage – Kawasaki and someone else
Aft Fuselage/Horizontal tail – Alenia ( Italy ) & Vought ( Texas )
Similar was done with 777 and others. Anyway kinda weird. Boeing just went out and bought 3 passenger 747s from some airline ( probably some sitting idle in the desert ) to have them converted to cargo carry. These jets will ferry all the worldwide components to the Washington State final assembly plant. ( components delivered in 1 day instead of 30 days by ship )
It is funny though to see some of our dim wit politicos ( especially a few clueless_about_the_world Washington State types that Boeing has paid off ) knock themselves out trying to be heros making political hay in this era where jets are made like cars now ( multi-national ) i.e. 7E7 is good for all concerned economies just as the 380 and other Airbus products are multi-national diverse and produce jobs for everyone, not just the competitor camps.
By: ELP - 10th October 2004 at 10:21
What is funny is that not much of the 7E7 is “U.S. made”. It is a multi-national setup. 35% Boeing, 35% Japanese companies, 26% Vought/Alenia. Another 4% ?
Vertical Fin – Boeing ( Frederickson )
Wings Movable Trailing Edge – Boeing ( Australia )
Nose – Boeing ( Wichita)
Wing-to-body fairing – Boeing ( Canada )
Wing leading edge devices – Boeing ( Tulsa )
Wings – Mitsubishi / Kawasaki / Fuji ( Japan )
Fuselage – Kawasaki and someone else
Aft Fuselage/Horizontal tail – Alenia ( Italy ) & Vought ( Texas )
Similar was done with 777 and others. Anyway kinda weird. Boeing just went out and bought 3 passenger 747s from some airline ( probably some sitting idle in the desert ) to have them converted to cargo carry. These jets will ferry all the worldwide components to the Washington State final assembly plant. ( components delivered in 1 day instead of 30 days by ship )
It is funny though to see some of our dim wit politicos ( especially a few clueless_about_the_world Washington State types that Boeing has paid off ) knock themselves out trying to be heros making political hay in this era where jets are made like cars now ( multi-national ) i.e. 7E7 is good for all concerned economies just as the 380 and other Airbus products are multi-national diverse and produce jobs for everyone, not just the competitor camps.
By: beistrich - 9th October 2004 at 15:16
Absolute nonsense. go away and take your hornets nest stirring elsewhere.
The friction is only there because the likes of beistrich stir things up. He responds negatively to any post I make. regardless. and you, well you just help.
I post in this thread and you answer with a stupid insult.
I know you have a proplem with airbus(call it childish or stupid) but answer in a civil-manner (like grey area say it)
My point is, Airbus have been playing the system for long enough. Its time they pay back with realistic terms and not fairytale rates.
Its normaly that the Union (and the States too) support the Industry with loans. Good for the Economics. The Airbus-loans are legal and like the other times they will pay it back. But are the Boeing loans legal? Maybe the lawers or the WTO will tell it to us.
By: beistrich - 9th October 2004 at 15:16
Absolute nonsense. go away and take your hornets nest stirring elsewhere.
The friction is only there because the likes of beistrich stir things up. He responds negatively to any post I make. regardless. and you, well you just help.
I post in this thread and you answer with a stupid insult.
I know you have a proplem with airbus(call it childish or stupid) but answer in a civil-manner (like grey area say it)
My point is, Airbus have been playing the system for long enough. Its time they pay back with realistic terms and not fairytale rates.
Its normaly that the Union (and the States too) support the Industry with loans. Good for the Economics. The Airbus-loans are legal and like the other times they will pay it back. But are the Boeing loans legal? Maybe the lawers or the WTO will tell it to us.
By: Grey Area - 9th October 2004 at 13:43
I call it childish because it is.
You call it humour because you clearly know no better. :p
Best to leave it now, and get back to talking about aircraft.
By: Grey Area - 9th October 2004 at 13:43
I call it childish because it is.
You call it humour because you clearly know no better. :p
Best to leave it now, and get back to talking about aircraft.
By: Bmused55 - 9th October 2004 at 13:34
Translation: “It wasn’t me – a big boy did it and ran away!!!” :diablo:
At least you’ve stopped pretending that you’ve nothing against Airbus, if your rather childish avatar is anything to go by. :rolleyes:
You call it childish.
Others call it Humour. go look that up in the dictionary. I think you need to learn about it.
By: Bmused55 - 9th October 2004 at 13:34
Translation: “It wasn’t me – a big boy did it and ran away!!!” :diablo:
At least you’ve stopped pretending that you’ve nothing against Airbus, if your rather childish avatar is anything to go by. :rolleyes:
You call it childish.
Others call it Humour. go look that up in the dictionary. I think you need to learn about it.
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October 8, 2004 at 2:28 pm