Mon, Apr 11, 2005
US, EU Officials Continue To Bicker Over Subsidies
The feud between Airbus and Boeing, now playing out under
threats from both sides that this whole matter will end up in a
world trade court, grew even more rancorous on Monday, as the EU
demanded Washington end tax breaks and research help to Boeing.
Reductions in aid to commercial aircraft manufacturers on both
sides of the Atlantic "have got to be done in an equal and balanced
way," said EU Trade Commissioner Peter Mandelson in an interview
published in Brussels. As ANN reported over the weekend, the EU and
US failed to reach a settlement in the thorny dispute, blowing
right past the April 11th deadline for achieving such an
accord. But both sides have agreed to continue talks
in hopes of averting what would be the biggest suit ever brought
before the World Trade Organization.
In the meantime, however, both sides are free to pull the
trigger on their legal guns, waiting in the wings. Yet, Mandelson
told the Belgian newspaper "It should be possible still at this
stage to reach an amicable settlement to this dispute. Airbus and
Boeing could do with less public subvention."
The dispute was triggered by Boeing's announcement that it would
go ahead with development of what is now called the 787 Dreamliner,
while Airbus said it would build the A350 to compete. Airbus is now
awaiting word on $1.7 billion in launch aid for the A350 project,
while Boeing openly shopped for the most favorable tax breaks in
locating its 787 manufacturing components. Final 787 assembly was
eventually awarded to the company's plant in Everett, WA.
If the current rhetoric is any indication, efforts to settle the
dispute are going nowhere fast. "A very strong demand was being
made on the European side to abandon immediately the entire sort of
basic principles and character of all government investment in
Airbus without commensurate, offsetting and balancing moves by the
American side as regards Boeing," Mandelson said, quoted by
Bloomberg News. "That doesn't exactly make for a good negotiation"
or a "very fair settlement."
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