Boeing: Airbus, EU Blocking Subsidy Settlement

Chicago-based airplane maker accusing rival of taking advantage of up to $205 billion in European subsidies to win long-standing Boeing customers and become the world airplane leader.

GENEVA (AP) β€” American airplane manufacturer Boeing Co. accused rival Airbus and the European Union on Wednesday of standing in the way of a settlement to their trans-Atlantic dispute over subsidies in the aviation industry.
 
Spokesman Tim Neale said Boeing had yet to receive an offer from the EU or Airbus to eliminate the below-market loans known as ''launch aid,'' which the Chicago-based plane maker and the U.S. government have challenged at the World Trade Organization.
 
The 27-nation EU's top trade official warned Tuesday that it may be impossible to settle the massive commercial dispute for another two years, or even longer.
 
''We are not aware of any (EU) or Airbus offers to resolve this dispute that would address the most market-distorting subsidies,'' Boeing's Neale said in an e-mailed statement.
 
The competing WTO cases rest on the ability of Washington and Brussels to demonstrate that their industries have been harmed by the other's subsidies. Both have presented evidence of lost plane sales or lowered prices to back up claims.
 
Globally, the market for planes is worth an estimated $3 trillion over the next two decades.
 
Mandelson told the European Parliament late Tuesday that several ''good faith attempts'' have failed to resolve the impasse. The differences between the two sides have been too big, Mandelson said, adding that he was ''skeptical whether this dispute can be resolved at the negotiating table any time soon.''
 
The U.S. accuses Airbus of taking advantage of decades of European subsidies worth the equivalent of up to $205 billion to capture long-standing Boeing customers and become the world's largest seller of planes.
 
The EU, meanwhile, refers to tax breaks, development funding and outright grants to Boeing as examples of wrongdoing by the U.S. government and the states of Illinois, Kansas and Washington. It also accuses the U.S. of providing vast amounts of hidden support to Boeing through military contracts, citing a total subsidy figure through 2024 of $23.6 billion.
 
''The U.S. has denied there are any subsidies provided to Boeing, while at the same time demanding as a precondition that the EU put an end to European support to Airbus,'' Mandelson said in Strasbourg, France. ''You will appreciate that on this basis it has not been possible to establish a fair and balanced basis for a negotiated settlement.''
 
An interim ruling in Washington's WTO case against Brussels was scheduled for October, but has been delayed probably until early 2008 because of the complexity of the dispute. A decision on the EU's complaint is not expected until the middle of next year. Both would be subject to appeals.
 
The office of the U.S. Trade Representative said it was still hoping for a negotiated settlement that eliminates all WTO-inconsistent subsidies.
 
''Meanwhile, we remain confident in a favorable outcome through litigation,'' spokeswoman Gretchen Hamel said.
 
The WTO decision could have far-reaching ramifications for Airbus, which still must decide how it will fund its midsize, long-range A350 XWB. The plane aims to rival the Boeing 787 Dreamliner but has already been subject to a costly redesign.
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