Fri, Nov 17, 2006
"Line Needs To Be Drawn In The Sand Now"
The European Union spends too much on Airbus. This, according to
an updated complaint filed by the US with the World Trade
It's the latest volley fired across the water between rivals
Airbus and Boeing, that began in 2004 when US trade officials first
argued Airbus unfairly received over $20 billion in government
subsidies for its aircraft programs. The US filed complaints again
in 2005 and 2006 -- each met with counterclaims from the EU.
Each manufacturer claims the other gets too much help from its
government. US trade representatives say EU spending on Airbus is
inconsistent with WTO rules... but add they are willing to
The sticking point for the US is
so-called launch aid. That's the money a government spends to help
a company develop new aircraft. The US says launch aid must be paid
back when the plane starts selling... which is something the EU has
not forced Airbus to do.
The issue was renewed again this week. The London Telegraph
reports French Prime Minister Dominique de Villepin said his
government would offer over $1 million to Airbus suppliers hurt by
delays with the A380 program... and those are fighting words for
"A line needs to be drawn in the sand now," said Charlie Miller,
a spokesman for Boeing. "Airbus is financially strong and does not
need additional launch aid."
The EU says Boeing gets its own subsidies from military
contracts, and tax breaks from local government.
"The good news is that the WTO process finally will demonstrate
that Boeing is guilty of receiving billions of government money for
commercial aircraft," said Airbus spokesman Clay McConnell.
Despite the rhetoric, US trade reps say Wednesday's filing was
largely procedural. It met a deadline that sets the clock ticking
for an Airbus reply.
That reply must come by February 9... and you can be sure Airbus
will meet that deadline.
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