By Chris Jones - 6th October 2005
EU trade officials still believe that an agreement can be reached with the US on aid payments for Airbus, despite a downbeat response to the latest European concessions.
The US is preparing a case against Europe at the WTO over so-called launch aid payments to the European aircraft maker.
Washington claims the aid gives Airbus an unfair advantage over its US-based rival Boeing.
The US aircraft maker also receives sgovernment ubsidies.
EADS, the company which owns Airbus, announced in May that it was prepared to negotiate on the payment of aid for its Airbus A350 aircraft.
And EU Trade Commissioner Peter Mandelson has agreed with the four member states where EADS is based (France, Germany, Spain and the UK) that aid payments agreed for 2006 will be delayed, in a bid to resolve the dispute before it goes to the WTO.
“Any launch aid payments to Airbus would have made it impossible for the US to negotiate,” said a spokesman for the commissioner.
“We have made it crystal clear that we will not make any payments in 2006 provided an agreement can be reached.”
“But what happens on one side of the Atlantic should also happen on the other.”
Not far enough
However, US trade representative Rob Portman believes that this does not go far enough.
“The commitment of launch aid by any of the EU member states is yet another step in the wrong direction,” his spokesman said.
“We want to negotiate an end to aircraft subsidies, but the commitment of aid makes that even harder to do.”
“The announcement of their commitment to back the A350 will affect Airbus’s financing costs regardless of when they formally write the cheque.”
He added that it was clear that the EU was unwilling to stop subsidising Airbus.
“Therefore, we will continue to push ahead with our WTO case.”
Surprised
The commission spokesman said Mandelson was surprised at the US reaction.
“We have clearly said that if the US and the EU reached a negotiated settlement on the issue of support to large civil aircraft, European government funding would be adapted to comply with the terms of the agreement.”
“In these circumstances, and given the continuing subsidies available to Boeing for the launch of the 787, the statement is surprising.”
He added that he would be seeking clarification of the US position from Portman.
The two trade chiefs will meet next week during multinational talks on the upcoming WTO development talks, and the spokesman said it was “inconceivable” that the Airbus case would not be discussed.
“We still believe a negotiated settlement is the best solution to this dispute.”
“We therefore urge the US to respond positively to a move which we believe is worth pursuing.”
Have your say...
Please enter your comments below.