This One Could Take Years
Not at all happy at the prospect, World Trade Organization
officials Wednesday began the daunting task of sifting through a
dispute between the US and EU over subsidies to aircraft
manufacturers Boeing and Airbus.
"It is with regret" that
the EU requested a panel because "it has made genuine attempts to
settle the case amicably instead of pursuing the path of
litigation," the European Commission, the bloc's executive, said in
a statement in Geneva. "Unfortunately, the US was not prepared to
move an inch." He was quoted by Bloomberg News.
American trade officials have said as much about what they see
as European intransegence.
But those words don't jive with actions by both sides -- each
accusing the other of piling on complaint after complaint to their
original WTO cases. It could take years for this case to run its
course through the World Trade judicial system.
Judges are expected to have a prleiminary ruling on the matter
in about nine months, but observers say that's just the
As ANN has reported in several stories, the
dispute began when Boeing officials complained bitterly to the Bush
administration about the loans Airbus receives from European
governments to finance the launch of new aircraft lines. If the
line succeeds, the loans are repaid. If the line doesn't succeed,
however, the loans can be -- and often are --
The Europeans figure it this way: Not only does Boeing get
cities, counties and states to compete for its manufacturing
facilities by offering generous tax breaks, but NASA has poured $22
billion in grants into the Chicago-based company's coffers.
They accuse Washington
of giving Boeing more than $350 million a year in tax subsidies
which have, according to the EU, been twice ruled illegal by the
WTO. Finally, the Europeans accuse Japan of sending over $1.6
billion in launch aid for the 787.
What will the WTO be able to do in the end? Observers aren't
sure -- because this is a first for the international body. But the
organization's rules and regulations "aren't built to deal with
subsidies that are expected but haven't been delivered and effects
that are feared but haven't happened," former US trade negotiator
Charles Roh, told Bloomberg.