Haven’t seen these news on this board yet …
http://news.airwise.com/story/view/1111300394.html
—
The United States and Europe traded threats and accusations on Saturday in a fresh escalation of the row over subsidies for aircraft rivals Boeing and Airbus that risks souring transatlantic ties.
The two sides last year launched competing litigation at the World Trade Organization (WTO) but had agreed on January 11 to a three month truce in the hope of reaching a negotiated settlement on eliminating subsidies to the aviation companies.
Using unusually blunt language, European Union Trade Commissioner Peter Mandelson rebuffed US accusations that Brussels was blocking talks, saying that Washington was responsible for the apparent collapse of negotiations.
“I regret this unilateral action in breaking off the negotiations,” Mandelson said in a statement. “I am happy to return to the negotiating table.”
His remarks followed a telephone conversation on Friday, which an EU official said was abruptly ended by outgoing US Trade Representative Robert Zoellick after Mandelson mapped out plans for a phased approach to a deal.
“Mandelson was surprised about the abrupt way it all ended… It was rather odd behavior between partners and friends,” the official said, asking not to be named.
Zoellick’s spokesman, Rich Mills, retorted: “It was commissioner Mandelson who terminated yesterday’s call.”
Nevertheless, Mills took a more conciliatory line, saying Washington was ready to resume talks, negotiate beyond the original April 11 deadline if need be and even pursue the phased approach proposed by Mandelson.
“The problem is that over the last two months the EU has been focused more on manoeuvering than on negotiating the core substance,” he said.
Although both sides appeared keen to cool the rhetoric on Saturday, the EU said that if Washington took the matter back to the WTO, it would resume its own litigation and would press on with providing launch aid for Airbus’s new model, the A350.
The litigation could put a huge strain on the WTO and open the door for massive trade sanctions on both sides. It could pressure US-EU ties at a time when the two need to cooperate to bring the latest round of world trade talks to a conclusion.
Many observers originally said the United States went on the offensive last year to boost President George W Bush’s standing in Washington State, Boeing’s industrial homeland, ahead of presidential elections.
But the real catalyst was the prospect of European subsidies for the launch of the A350, which would challenge Boeing’s new 787.
Washington wants Europe to stop providing “launch aid” loans to Airbus, which have added up to some USD$15 billion since 1967 and include USD$3.2 billion for the new A380 superjumbo jet.
Airbus counters that Boeing benefits from tax breaks in Washington State, federal contracts for military and space research and Japanese government support.
(Reuters)
By: bkonner - 22nd March 2005 at 01:09
Howdy,
As an American I was going to remark that the US federal government provides no subsidies to Boeing and that the state of Washington provided minimal subsidies. While the US government doesn’t, I guess the fact is that the state of Washington does. See the following URL:
http://seattlepi.nwsource.com/business/197093_subsidy28.html .
Apparently the state of Washington provided $ 3.2 billion (over 20 years) worth of “incentives” for Boeing to produce the 7E7 in Everett, WA. While this is less than what the EU give Airbus, it is substantial. In US state politics, this is aimed at keeping Boeing from moving jobs to other states. Most states, except mine (Massachusetts), do this; Massachusetts seems to do pretty well without supporting its local industry, which is mostly high-tech, bio-technology, mutual funds, medical, and education. You see this a lot in automobile production in the US and Canada by the provinces and states.
The EU certainly should take the state of Washington to court to eliminate these unfair subsidies. The US probably should do the same with the EU, France, Germany, and the UK. Both companies should compete in a level playing field. Since there is no competition except between the two with aircraft larger than the A318, there is no threat at the moment of production moving to another country. I would imagine that Brazil provides aid to Embraer in its production of the 170/175 & 190/195 development; but I do not know this as a fact (just an assumption).
Both companies are now mature and do not need state aid to compete against each other.
Just my opinon!
Bkonner
By: bkonner - 22nd March 2005 at 01:09
Howdy,
As an American I was going to remark that the US federal government provides no subsidies to Boeing and that the state of Washington provided minimal subsidies. While the US government doesn’t, I guess the fact is that the state of Washington does. See the following URL:
http://seattlepi.nwsource.com/business/197093_subsidy28.html .
Apparently the state of Washington provided $ 3.2 billion (over 20 years) worth of “incentives” for Boeing to produce the 7E7 in Everett, WA. While this is less than what the EU give Airbus, it is substantial. In US state politics, this is aimed at keeping Boeing from moving jobs to other states. Most states, except mine (Massachusetts), do this; Massachusetts seems to do pretty well without supporting its local industry, which is mostly high-tech, bio-technology, mutual funds, medical, and education. You see this a lot in automobile production in the US and Canada by the provinces and states.
The EU certainly should take the state of Washington to court to eliminate these unfair subsidies. The US probably should do the same with the EU, France, Germany, and the UK. Both companies should compete in a level playing field. Since there is no competition except between the two with aircraft larger than the A318, there is no threat at the moment of production moving to another country. I would imagine that Brazil provides aid to Embraer in its production of the 170/175 & 190/195 development; but I do not know this as a fact (just an assumption).
Both companies are now mature and do not need state aid to compete against each other.
Just my opinon!
Bkonner
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March 21, 2005 at 6:50 pm