Europeans File Promised WTO Countersuit Over Subsidies
One day after the US filed its World Trade Organization lawsuit
against the European Union over subsidies paid by EU governments to
Airbus, the Europeans struck back, accusing local US governments of
spending even more money on Boeing.
In their filing, the Europeans said government aid to Airbus
amounts to investment, not subsidy. In filing, EU Trade
Commissioner Peter Mandelson lashed out at the US and at
"I am disappointed that the US has chosen this confrontation
with Europe," he said. "America’s decision will, I fear,
spark probably the biggest, most difficult and costly legal dispute
in the WTO’s history. It will be hard fought on both sides
and, I can assure you, Europe’s interests will be fully
Mandelson said he'd done more than his share in trying to reach
a compromise agreement with his US counterpart on the
aircraft-maker subsidy issue.
"I went the extra mile for an amicable solution," he told
reporters, "most recently last week by proposing an accelerated
negotiation in which I was prepared to offer a reduction of up to
30 per cent of launch investment to the new A350 – and on
tighter terms – in return for a similar offer on the American
"But there was no appetite for compromise in Washington,"
Mandelson continued. "Boeing demanded the complete, immediate
renunciation by Airbus of all repayable, royalty-based launch
investment as a prior condition to negotiation.
"In doing so, Boeing ensured that no negotiation took place. No
commensurate balancing package was on offer at any stage to deal
with Boeing’s extensive multi-billion dollar financing from
the American taxpayer."
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.
"Europe and America are going head to head over the commercial
rivalry of two companies, Boeing and Airbus, who should be left to
compete in a global marketplace big enough to accommodate them
both," Mandelson said.