French Aerospace Industry Urges 'Balanced' Resolution Of Airbus/Boeing Dispute

The French aerospace industries association, GIFAS, called Tuesday for a "balanced" agreement between the United States and the European Union in the dispute over public subsidies to aviation rivals Airbus and Boeing, and urged including Japan in the negotiations.

"We hope that there will be an agreement," said Philippe Camus, president of GIFAS (Groupement des industries francaises de l'aeronautique et de l'espace), at a press conference presenting 2004 financial results in the sector.

"What we hope is that the conditions agreed to are balanced, because they are not so today," said Camus, who is also co-chairman and co-chief executive of the European Aeronautic Defence and Space Company (EADS), which controls 80 percent of aircraft manufacturer Airbus.

The dispute flared in October when the United States lodged a complaint at the World Trade Organization against what it insisted were unfair government subsidies provided to Airbus.

That action prompted a counter-suit from Brussels against what it said was indirect US government aid for Boeing through defense and research contracts.

Then in January the two sides, in a bid to avoid a bruising legal battle, pulled back from WTO intervention by agreeing to a 90-day "standstill" period -- which ends April 11 -- to negotiate a phasing-out of subsidies to develop commercial aircraft.
Henri Martre, a member of the GIFAS committee and former president of Aerospatiale, called for the case of Japan to be included in the negotiations.

"Japan, in the development of civil aviation, is intimately linked to the United States," Martre said. "If Japanese aid benefitting Boeing isn't included in the balance of aid between Airbus and Boeing, Europe would be crazy to accept an agreement like that."

The European Union has already complained that Japan is indirectly subsidising Boeing's 787 Dreamliner through the participation of top Japanese firms in the project. The Dreamliner, which is expected to make its debut in 2008, is a fuel-efficient jet that can hold up to 300 passengers and is seen as critical for Boeing in its rivalry with Airbus.
 
Earlier Tuesday, US Deputy Secretary of State Robert Zoellick said the United States was willing to continue the current "standstill" period to negotiate a solution if the Europeans wanted.

A European Commission spokeswoman responded that the Europeans were prepared to resume negotiations and that the April 11 deadline still stood.

She added that "we have had no reaction so far to the proposals which have been made" by EU trade commissioner Peter Mandelson, which included a step-by-step approach to resolve the dispute.

FMI: http://europa.eu.int