Airbus-Boeing Legal Battle Faces Setback

Verdicts have been further delayed in the U.S.-EU dispute over government support for rival plane makers Boeing Co. and Airbus.

GENEVA (AP) β€” Verdicts have been further delayed in the U.S.-EU dispute over government support for rival plane makers Boeing Co. and Airbus, officials said Wednesday as the World Trade Organization began its final panel hearings.
The biggest commercial dispute ever β€” in a market worth an estimated US$3 trillion (euro2 trillion) over the next two decades β€” has also become the slowest in the 13 years of the WTO, as a result of numerous complications and tactical maneuvering since Washington and Brussels initiated complaints in October 2004.
The WTO set up competing panels a year later, giving them until July 2006 to complete their work. At least one investigation will definitely run over two years behind schedule.
Boeing officials said they believed a first, interim ruling could come as early as April in the U.S. case alleging that Airbus developed new planes and captured long-standing Boeing customers with the aid of billions of dollars in government loans at below market rates β€” in violation of global trade rules.
A final verdict would then come out in June or July, said Bob Novick, a former U.S. trade official who advises Boeing on WTO matters. He said a ruling on EU claims of illegal tax breaks and outright grants to Boeing would trail by about six months.
EU officials said they had received guidance that the first panel would complete its work ''at some point in 2008.'' They refused to estimate the lag time they expect between decisions.
Brussels gave its final defense in July of the ''launch aid'' it has provided Airbus with before the panel rules on whether it is legal. The decision could have far-reaching ramifications for the France-based manufacturer, which still must decide how it will fund its midsize, long-range A350 XWB β€” meant to compete with Boeing's 787 Dreamliner.
In Toulouse, France, Airbus announced Wednesday that it trailed Boeing in logging new orders last year by a total of 72 planes, but that it beat its U.S. rival 453-441 in terms of deliveries. The company, which has suffered from production setbacks and leadership crises in recent years, also said it beat its internal targets for costs savings.
Boeing announced earlier this month that last year was the best since 2001. Together, the two companies set an industry record for orders in 2007.
The strong performances, however, are making it more difficult for the U.S. and EU to argue before the WTO that the alleged subsidies are causing financial harm.
Both governments have presented the WTO with evidence of lost plane sales or lowered prices to back up their claims, which were first made when the aviation industry was still suffering from the economic downturn after the terror attacks on Sept. 11, 2001.
The WTO could eventually award billions in retaliatory sanctions, though many analysts and top politicians have warned that a legal stalemate is the most likely outcome.
In November, the EU's trade chief said the U.S. and Europe may be unable to reach a settlement for another two years, or even longer, after the failure of several ''good faith attempts'' to break the impasse outside of the WTO.
Boeing officials said the last serious effort to hammer out an out-of-court agreement was nearly two years ago. EU officials declined Wednesday to say if there have been any new attempts to return to the negotiating table.
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