US rejects EU's claim it complied with WTO ruling on Airbus subsidies

By Aaron Karp | December 12, 2011

US trade representative Ron Kirk adamantly rejected the EU's recent contention that it has taken appropriate action to comply with the World Trade Organization's (WTO) ruling earlier this year that Airbus benefited from illegal subsidies.

He charged Friday that available information "appears to show that the EU has not withdrawn the subsidies in question and has, in fact, granted new subsidies to Airbus' development and production of large civil aircraft." He even went so far as to ask WTO to grant the US authority to impose billions of dollars in annual financial penalties against the EU.

Airbus said earlier this month that the EU has made "limited changes" that remedy the illegal aid WTO ruled the manufacturer received on the A380 program, insisting that major reforms aren't necessary (ATW Daily News, Dec. 2). The EU and Airbus are now in "full conformity with WTO obligations," Airbus stated.

But Kirk said in a statement that the US does not believe the EU and Airbus have complied and is asking WTO for authority "to impose countermeasures annually in response to the EU's claim that it fully complied with the ruling in this case. The amount of the countermeasures would vary annually, but in a recent period would have been in the range of $7-$10 billion."

He added, "The United States cannot accept anything less than an end to this subsidized financing. The United States remains prepared to engage in any meaningful efforts, through formal consultations and otherwise, that will lead to the goal of ending subsidized financing at the earliest possible date." He claimed that the subsidies received by Airbus "have directly resulted in Boeing losing sales involving purchases of Airbus aircraft by easyJet, Air Berlin, Czech Airlines, AirAsia, Iberia, South African Airways, Thai Airways International, Singapore Airlines, Emirates Airline and Qantas."

Airbus reiterated Friday that it is "confident it has fully addressed WTO demands."

Boeing said it is "disappointed that EADS/Airbus and European governments have failed to comply with the WTO's landmark ruling against launch aid … Boeing strongly supports all the efforts by the US trade representative to seek full compliance." Boeing claimed that, in addition to prior illegal aid on the A380 program, Airbus is now receiving improper "non-commercial launch aid … for the A350."

Discuss this news 21

11 Dec20:30

Let's start by requiring the

By Anonymous

Let's start by requiring the DOT make public all air carrier annual BTS lease reports. No more keeping those reports confidential. Should provide for some very interesting. reading.

11 Dec21:09

I hope to see the end of

By skyward

I hope to see the end of Airbus soon!

11 Dec23:45

AIrbus might have some aid,

By Anonymous

AIrbus might have some aid, Boeing has the lobbying which has some effect of their sales. Boeings's delays in 787 as well as 747-800, is a result why many have selected Airbust in order to meet their needs, maybe the same thing will happen with the A350 delays, Boeing will recover some customers. One this has to be recognized and it does make a huge difference for most of Airbus customers, is the use of crews on their Airbus 318/319/320/321/330 etc,fuel efficency. Boeing aircraft are more restricted, there are carriers in the USA with a large fleet of 767 and have 5 different versions, that is costrly for any airline.

12 Dec01:43

What a brillaint comment by

By Anonymous

What a brillaint comment by Skyward. I wonder if he is employed by Boeing or is simply brain dead. He apparently wants a monoploy so that Boeing can price their products at what ever level they wish, to maximise profits.
In addition, he forgets that
1 Boeing said FBW was NOT for Civil aircraft when Airbus intoduced the A320. Its now used on the 777 and 787.
2 Boeing said wet tailplanes were not good but now use them.
3 Boeing lost a 747 because there were no blow out doors beyond the rear pressure bulkhead. Airbus had already designed them in to their widebodies.
4 Until United ordered A320s, Boeing soldiered on with the classic 737. Then they had to redesign and introduce the 737NG-which has sold fewer than the A320 family, since it was offered.So perhaps customers like a choice.
5 Boeing have enjoyed tax breaks from Washington State (approx $3 billion), tax breaks on all exports for years, NASA "development" contracts, huge military orders for C-97, KC 135 which carried over on to the civil projects, etc, etc. Look at the farce for the recent Tanker competition. A level playing field?
So, Boeing is lily white and Airbus is 100% in the wrong. I don't think so!
Also,no innovation until Boeing finally decides to do it.
WOW!

12 Dec20:51

Anon' above, much of what you

By IguanaDC3

Anon' above, much of what you submitted above is correct, but much of it is patently false and/or warped out of context, leading one to believe perchance that you are an Airbus employee or are otherwise similarly biased as well. Furthermore, Boeing's led the way, both in terms of new technology & of marketing (w/in the realms of pax and esp' of airfrgt), for decades & in many regards it still does. Much of Airbus's success over time was earned but much was also "borrowed", if not stolen outright, by 'bus itself, i.e. from Boeing's STILL-vastly superior Triple7 program. You should research that with the same diligence with which you "researched" the above pro-'bus claims, at which time you'll note that the Euro's have indeed been cheating the system & also practically GIVING away their a/c for the shortsighted sake of mere market share enhancement & sexy PR headlines (which is JohnBoy Leahy's specialty, fyi). They'd play fair -- in the name of pure competition which you rightly claim to champion -- if they thought they could win fair. They can't, so they don't --- & neutral overseers the world over are confirming that now.

12 Dec20:57

So, your name is "Anonymous"?

By skyward

So, your name is "Anonymous"? Good start for making a credible statement. I could be brain dead, but I don't think so, "Anonymous". I have a brain that is very functional. It seems that you are disillusioned and clouded by the Airbus conglomerate and 'Euro-protectionism' of the Socialist state. Your points are inaccurate, at least.

There is a HUGE difference between tax breaks and the 'fail-safe' money that is handed out to Airbus from the EU government. Euro 'fail-safe' money put Airbus in a position that allowed the A380 to come to fruition, without worry of failure. Much like the SST of the 70's that Boeing dropped, but the (then) Euro State subsidized (notice the "z" in subsidize?) the project and kept it going (unprofitable) until I saw the last Concorde landing in Seattle in 2003. I hope that the WTO will continue to diligently do its job and the result will be total egg-in-the-face for Airbus and expose all of its skeletons. I stand behind Boeing and I fully believe that Boeing will be victorious.

Now, on the other hand, I do not want ANY monopoly. I want to see Airbus play by the rules...I want fair game! It's not about product. Airbus can make a good product. May the best win!

13 Dec00:35

RE: Anonymous Well, said and

By eric

RE: Anonymous
Well, said and to the point. The problem is that patriotism does cloud peoples minds no matter what the reality.

13 Dec01:28

Re: iguana Well, these are

By eric

Re: iguana
Well, these are harsh words and accusations. Let's start with Airbus employee. You wouldn't by chance work for Boeing, would you? If you do, your accusations and distortions can be excused, but not swallowed. Otherwise it boils down to, it's amazing what patriotism does to people's minds.

13 Dec20:43

Eric, no, I'm not a Boeing

By IguanaDC3

Eric, no, I'm not a Boeing employee although I'd be honored to accept an offer from that team if extended. As for accusations being harsh, you should grow a thicker skin if you're going last long within THIS realm. There was nothing harsh about it. Rather, I proposed factual balance. There's nothing ill about patriotism per se although that's not at all what inspired me to refute Anon's distortions and false pro-'bus claims.

13 Dec21:53

Huh? What did he say?

By skyward

Huh? What did he say?

14 Dec06:53

Hiya, Skyward. He, being

By IguanaDC3

Hiya, Skyward. He, being Eric, seems to agree with Anon' above, in opposition to you & to me. Go figure; so much for the Age of Enlightenment.

14 Dec22:27

Re-Iguana: Hiya, Skyward. He,

By eric

Re-Iguana: Hiya, Skyward. He, being Eric,
Yes, I do because he is correct. Boeing had the market quite a long time for itself and fell asleep at the joystick. Airbus came along with a lot of innovations of which FBW for civil aircraft was one and uniform cockpit configurations another and the list goes on....... Most importantly it builds its planes in modern metric not medieval inches. That alone seems pretty well enlightened to me.

15 Dec06:23

Whether or not a mfg process

By IguanaDC3

Whether or not a mfg process utilizes metric over traditional standard measurement does not establish a superiority of product quality, innovation or airworthiness. Heavens, there'd BE no Airbus at all if not for Boeing in the first place, and the strong list of examples of Boeing's ongoing leadership w/in this realm stands the test of both time & of order-interest by clients both here & abroad. ALL mfr'rs doze off at the joystick now & then, as 'bus has done before & will again. To deny this is to deny the reality of human nature. (And) Boeing per se NEVER had this mkt to itself. For a long time, 'bus didn't build anything which was worth the buy-risk. Meanwhile, during 'bus's infancy & certainly before its birth as a Euro'state-supported pseudo-corp', Boeing contended with Douglas/McDonnell Douglas as well as with Lockheed, Fokker & Brit' Aero', so it hardly had ANYthing all to itself --- & neither of the duopolists has the mkt to themselves now, either, which should concern the subsidy-intoxicated Euro's now as well as it does the good folks at Boeing.

15 Dec23:17

There seems to be a lot of

By skyward

There seems to be a lot of 'rambling' going on with this posting. I don't want to contribute with that any more, I just want to share this...http://media.theage.com.au/business/businessday/787-dreamliners-record-breaking-trip-2829129.html

Oh, BTW, I remember that Mars lander that crashed due to metric thrust (mis)calculations. Give me pounds (hey, it's the British that started it) or give me Fahrenheit...either way I sweat. It just seems more correct to have water boiling at 212F than 100C.

15 Dec23:51

Agreed using metric does not

By eric

Agreed using metric does not establish superiority, but simplicity and all the advantages that come with it. Outsourcing the Dreamliner to a metric world has cost Boeing billions because metric engineers are not familiar with that cumbersome anachronism nor does it make sense to them. So what are the innovations Boeing contributed to aviation? Aside the composite Dreamliner, all I can think of is the size of planes from relatively small to big. The real advance in aviation was the jet engine, fly by wire and uniform cockpit configuration to name some. None of those came from Boeing.
Well, Airbus has outsold Boeing since 2003 and still does, I wonder why? And please don't tell me it gives its planes away for peanuts. Nor does the EU subsidy hold water if you care to inform yourself. When Airbus came along it was pretty well Boeing that dominated the market, because by then most others had fallen by the way side. Once more to subsidies, both companies are guilty with a slight difference, Airbus does it openly while Boeing hides them in government procurement and development costs.

16 Dec00:05

Re: skyward "Oh, BTW, I

By eric

Re: skyward
"Oh, BTW, I remember that Mars lander that crashed due to metric thrust (mis)calculations".

What a pathetic way to blame a measurement system instead of the people that use a mix of both and expect it to work. Without the metric system and Werner von Braun, you probably would still trail the Russians in space.

16 Dec06:15

Rambling? LOL Well, it all

By IguanaDC3

Rambling? LOL Well, it all had to start atop somewhere with someone, I suppose. That's a fine article to link to, btw, and no "sweat".

19 Dec03:21

The innovation inherent w/in

By IguanaDC3

The innovation inherent w/in the Triple7 program, i.e., has essentially killed the A340 and keeps the 330 on the ropes as well. The airfreighter market is OWNED by Boeing & its innovations over the years, and the mutually symbiotic relationship between its defense, space & commercial a/c realms clearly benefits & strengthens all 3 --- and NO Fed' subsidy is required to effort that, whereas Airbus's military designs, for starters, are clearly knockoff copies or outright thefts of American originals. Yes, it DOES give its a/c away at more severe discounts than does Boeing, most often because the corporate "bottom line" matters less to 'bus thanks to the fraudulent hypocrisy of its European crutches which artificially prop it up during periods of market angst. And Airbus has not outsold Boeing since 2003. A field day can be had with how stat's of those sorts are compile & calculated, then manipulated, & I suspect that you've done a lot of the latter with yours. The only thing that Airbus does openly (& innovatively) is whine about American federal support of Boeing, which IF it exists at all is merely but a defensive move to counter the myriad deceptions over there in elitist Toulouse.

19 Dec20:56

Amen, and well said, Iguana!

By skyward

Amen, and well said, Iguana!

19 Dec23:24

Anyone talked about rambling

By eric

Anyone talked about rambling on this site?

20 Dec02:19

Pot (or E'), meet Kettle.

By IguanaDC3

Pot (or E'), meet Kettle.