WORLD
U.S. threatens sanctions in Airbus battle with EU
Baku, December 10 (AZERTAC). The United States on Friday rejected a European Union plan to eliminate subsidies provided to Airbus and said it would ask the World Trade Organization for permission to impose trade sanctions that could amount to $7 billion to $10 billion annually.
The move marks a low point in the world`s biggest trade dispute, largely centered on European aid for the Airbus A350 aircraft. But an end to the battle over aircraft subsides could be some time away and a negotiated settlement may still be most likely outcome.
The EU has its own case against U.S. support for Boeing and resolving that will be part of the final mix.
But U.S. officials exploited a tactical advantage derived from the fact the WTO has already issued a final ruling in the U.S. case against Airbus subsidies while the EU case against Boeing subsidies is still pending.
"The WTO clearly found that every single grant of launch aid to Airbus, for every single aircraft that company produced, was a WTO-inconsistent subsidy that caused unfair adverse effects to U.S. industry and jobs," U.S. Trade Representative Ron Kirk said in a statement.
"Our action today underscores what we have said all along - that the United States cannot accept anything less than an end to this subsidized financing," Kirk said, referring to European "launch aid" loans for Airbus.
The United States is still prepared to negotiate with the EU with the "goal of ending subsidized financing at the earliest possible date," Kirk added.
The transatlantic aircraft dispute is the world`s largest trade fight, affecting more than 100,000 jobs in an airplane market worth more than $2 trillion.
John Clancy, a spokesman for the European Commission in Brussels, called the U.S. sanctions threat "premature and not in line with the appropriate sequence of events in WTO disputes. We will nevertheless review the requests carefully and consider the next steps."
Last week the EU presented a plan to comply with a WTO appellate body ruling against European government support for Airbus in a case brought by Washington in 2004.
A careful review of that document "appears to show that the EU has not withdrawn the subsidies in question and has, in fact, granted new subsidies to Airbus` development and production of large civil aircraft," Kirk`s office said, in apparent reference to Airbus`s A350 aircraft.