"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 Organization Wednesday.

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 negotiate.

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 Boeing.

"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.

FMI: www.wto.org, www.airbus.com, www.boeing.com