US takes Airbus dispute to WTO
The US government is to take the European Union to the World Trade Organisation (WTO) in an effort to stop member states “subsidising” Airbus.
Robert Zoellick, the US trade representative, said Airbus was now bigger than its US rival Boeing and continued public funding was unfair.
“This is about fair competition and a level playing field,” Mr Zoellick said.
The US and EU have 60 days to resolve the increasingly bitter dispute before the WTO will step in.
By: MSR777 - 7th October 2004 at 20:47
Thanks Dan, Its good to see in print what I suspected all along ref Boeing/Ryanair, this sounds conceited on my part but I’m not surprised.
Good Luck to the EU and Airbus on this one. It seems to be another good example of the U.S not being able to handle other peoples success very well.
We had the similar BS over Concorde I seem to remember.
By: MSR777 - 7th October 2004 at 20:47
Thanks Dan, Its good to see in print what I suspected all along ref Boeing/Ryanair, this sounds conceited on my part but I’m not surprised.
Good Luck to the EU and Airbus on this one. It seems to be another good example of the U.S not being able to handle other peoples success very well.
We had the similar BS over Concorde I seem to remember.
By: Dantheman77 - 6th October 2004 at 19:14
As i understand it,to help boeing, The us import and export bank, sets up very favourable loans to airlines who buy boeing airplanes with loans set up with as little as 5% interest (this is quoted from the book “Ryanair how a small irish airline conquered europe by Siobhan Creaton”), now seeings that this bank is a a govt agency run by the federal reserve, and on top of that,Boeing offering up to 35% discount on each plane,surely that could be contrived to the Fed offering a subsidy or unfair incentives to buy Boeing airplanes?
By: Dantheman77 - 6th October 2004 at 19:14
As i understand it,to help boeing, The us import and export bank, sets up very favourable loans to airlines who buy boeing airplanes with loans set up with as little as 5% interest (this is quoted from the book “Ryanair how a small irish airline conquered europe by Siobhan Creaton”), now seeings that this bank is a a govt agency run by the federal reserve, and on top of that,Boeing offering up to 35% discount on each plane,surely that could be contrived to the Fed offering a subsidy or unfair incentives to buy Boeing airplanes?
By: tenthije - 6th October 2004 at 18:45
There we go again. Why can’t they just leave it the way it is? EADS gets direct money from the European governments according to the rules set in 1992. Boeing gets indirect money from NASA, DoD and a few other research projects.
I do find it quite original for the US to unilaterraly void a treaty regulating subsidies (a treaty that the EU did not cross), and then saying Airbus gets too much subsidy!
By: tenthije - 6th October 2004 at 18:45
There we go again. Why can’t they just leave it the way it is? EADS gets direct money from the European governments according to the rules set in 1992. Boeing gets indirect money from NASA, DoD and a few other research projects.
I do find it quite original for the US to unilaterraly void a treaty regulating subsidies (a treaty that the EU did not cross), and then saying Airbus gets too much subsidy!
By: EAL_KING - 6th October 2004 at 18:28
latest news come in.
The US government is to take the European Union to the World Trade Organisation (WTO) in an effort to stop member states “subsidising” Airbus.
Robert Zoellick, the US trade representative, said Airbus was now bigger than its US rival Boeing and continued public funding was unfair.
“This is about fair competition and a level playing field,” Mr Zoellick said.
The EU said its relationship with Airbus was legal and it planned counter action over US support for Boeing.
It is high time to … end massive illegal subsidies to Boeing
Pascal Lamy, EU trade commissioner
“If this is the path the US has chosen, we accept the challenge,” Pascal Lamy, the EU’s trade commissioner, said.
“Not least because it is high time to put an end to massive illegal subsidies to Boeing which damage Airbus, in particular those for Boeing’s new 7E7 programme.”
‘Trade violation’
The US and EU have 60 days to resolve the increasingly bitter dispute before the WTO will step in.
The US also said on Wednesday that it would terminate a 1992 agreement with the EU which limits levels of government support for the development of civil aircraft.
The EU maintains that financial support given to Airbus by member states is within the terms of the agreement while accusing the US of providing huge indirect support to Boeing.
Mr Zoellick said EU members had given billions of dollars of financial support to Airbus in violation of international trade rules.
Market share
He said EU governments were pumping $6.5bn (£3.65bn; 5.27bn euros) into the development of the new Airbus A380 and were considering backing a competitor to Boeing’s proposed 7E7 Dreamliner, which will travel just under the speed of sound.
Airbus now sells more large civil aircraft than Boeing
Robert Zoellick, US trade representative
“Since its creation 35 years ago, some Europeans have justified subsidies to Airbus as necessary to support an infant industry,” Mr Zoellick said.
“If that rationalisation were ever valid, its time has long passed.”
Airbus now had a 50% market share in large commercial aircraft, he added.
“Airbus now sells more large civil aircraft than Boeing.”
Last week Mr Zoellick and Mr Lamy held talks to settle the issue, but failed to reach an agreement.
President Bush threatened to take the case to the WTO last month unless EU governments stopped providing loans, a move that some observers linked to the current presidential election campaign.
Agreement questioned
The US now wants to scrap the 12-year-old transatlantic agreement which governs state involvement in civil aircraft development.
Under the accord, EU governments can cover up to 33% of a manufacturer’s research and development costs with loans to be repaid over 17 years.
US critics of the agreement say Airbus does not have to repay the loans if its planes are not profitable.
EU countries say the US government is providing indirect support to Boeing, through the NASA space agency and military programmes, equivalent to 3% of the industry’s turnover.
Airbus was launched in 1970 by a consortium of French, German, Spanish and British companies.
It is now co-owned by European aerospace firm EADS and British defence and aerospace contractor BAE Systems.
By: EAL_KING - 6th October 2004 at 18:28
latest news come in.
The US government is to take the European Union to the World Trade Organisation (WTO) in an effort to stop member states “subsidising” Airbus.
Robert Zoellick, the US trade representative, said Airbus was now bigger than its US rival Boeing and continued public funding was unfair.
“This is about fair competition and a level playing field,” Mr Zoellick said.
The EU said its relationship with Airbus was legal and it planned counter action over US support for Boeing.
It is high time to … end massive illegal subsidies to Boeing
Pascal Lamy, EU trade commissioner
“If this is the path the US has chosen, we accept the challenge,” Pascal Lamy, the EU’s trade commissioner, said.
“Not least because it is high time to put an end to massive illegal subsidies to Boeing which damage Airbus, in particular those for Boeing’s new 7E7 programme.”
‘Trade violation’
The US and EU have 60 days to resolve the increasingly bitter dispute before the WTO will step in.
The US also said on Wednesday that it would terminate a 1992 agreement with the EU which limits levels of government support for the development of civil aircraft.
The EU maintains that financial support given to Airbus by member states is within the terms of the agreement while accusing the US of providing huge indirect support to Boeing.
Mr Zoellick said EU members had given billions of dollars of financial support to Airbus in violation of international trade rules.
Market share
He said EU governments were pumping $6.5bn (£3.65bn; 5.27bn euros) into the development of the new Airbus A380 and were considering backing a competitor to Boeing’s proposed 7E7 Dreamliner, which will travel just under the speed of sound.
Airbus now sells more large civil aircraft than Boeing
Robert Zoellick, US trade representative
“Since its creation 35 years ago, some Europeans have justified subsidies to Airbus as necessary to support an infant industry,” Mr Zoellick said.
“If that rationalisation were ever valid, its time has long passed.”
Airbus now had a 50% market share in large commercial aircraft, he added.
“Airbus now sells more large civil aircraft than Boeing.”
Last week Mr Zoellick and Mr Lamy held talks to settle the issue, but failed to reach an agreement.
President Bush threatened to take the case to the WTO last month unless EU governments stopped providing loans, a move that some observers linked to the current presidential election campaign.
Agreement questioned
The US now wants to scrap the 12-year-old transatlantic agreement which governs state involvement in civil aircraft development.
Under the accord, EU governments can cover up to 33% of a manufacturer’s research and development costs with loans to be repaid over 17 years.
US critics of the agreement say Airbus does not have to repay the loans if its planes are not profitable.
EU countries say the US government is providing indirect support to Boeing, through the NASA space agency and military programmes, equivalent to 3% of the industry’s turnover.
Airbus was launched in 1970 by a consortium of French, German, Spanish and British companies.
It is now co-owned by European aerospace firm EADS and British defence and aerospace contractor BAE Systems.
By: beistrich - 6th October 2004 at 18:07
Boeing want to pay lawyers and not build planes? But ok i think the Boeing-PR love the word “airbus” more as there own company name
btw: the Airbus subsidies are legal loans from the EU to Airbus, but are the Boeing subsidies legal?
By: beistrich - 6th October 2004 at 18:07
Boeing want to pay lawyers and not build planes? But ok i think the Boeing-PR love the word “airbus” more as there own company name
btw: the Airbus subsidies are legal loans from the EU to Airbus, but are the Boeing subsidies legal?
By: lba - 6th October 2004 at 16:13
There are plenty of counter arguments that Boeing subsidise their aircraft to secure lucrative military orders. I suppose all this keeps the lawyers in business.
By: lba - 6th October 2004 at 16:13
There are plenty of counter arguments that Boeing subsidise their aircraft to secure lucrative military orders. I suppose all this keeps the lawyers in business.
By: Bmused55 - 6th October 2004 at 15:33
Ok, the fact that this is going to the WTO will surely prove that there is GENIUNE concern over the situation.
This is no more hot air blowing from the Boeing PR dept.
I have read into the claims made by the Boeing team and if what they say is true airbus geniunely do have a very, very unfair advantage.
I await the counter argument and statements to see whats realy going on.
By: Bmused55 - 6th October 2004 at 15:33
Ok, the fact that this is going to the WTO will surely prove that there is GENIUNE concern over the situation.
This is no more hot air blowing from the Boeing PR dept.
I have read into the claims made by the Boeing team and if what they say is true airbus geniunely do have a very, very unfair advantage.
I await the counter argument and statements to see whats realy going on.
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October 6, 2004 at 3:27 pm