bocefus
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US warns of tough stance on subsidies for Airbus
Financial Times 05/26/05
author: Edward Alden
(c) 2005 The Financial Times Limited.
The US warned yesterday that it would seek to force Airbus to repay billions of dollars in European subsidies if Washington and Brussels could not strike a deal that would bar all future government support for the aircraft manufacturer.
Peter Allgeier, the deputy US trade representative, told a congressional hearing he was pessimistic that such a deal could be reached, and said the US remained poised to take the dispute to the World Trade Organisation.
"It appears to me that at least some of the European member states remain convinced they need to provide launch aid to Airbus, and unless that attitude changes the prospects for a settlement are not high," Mr Allgeier said.
But he added that if the dispute went to the WTO the US would raise the bar by demanding not just an end to future subsidies but the "repayment of launch aid" for the jumbo A380 and the proposed A350.
Mr Allgeier said the US estimated that in total Airbus had received more than $15bn (€11.5bn, £8.3bn) in subsidies through upfront launch aid from France, Germany, Spain and the UK.
The threat may be difficult to carry out. If a WTO case went forward, it would be at least 18 months before a decision was reached, and the normal penalty provided for under WTO rules would be US tariff penalties against European imports.
In addition the EU would likely respond by seeking similar repayment of US government support for Boeing.
The tough US stand comes as the four European governments are weighing a request from Airbus to provide new launch aid for the A350, a proposed mid-sized competitor to Boeing's successful 787 long-range jet.
Airbus is pushing the governments to reach a decision by mid-June, which would allow for the A350 to be formally launched at the Paris Air Show, which begins on June 13.
The US has said it will take the dispute to the WTO immediately if the governments commit new launch aid for the A350.
Brussels has been hoping for a negotiated deal that would reduce the level of government support for both Airbus and Boeing, but would not abolish launch aid.
But Mr Allgeier said the US goal remained "to eliminate the subsidies, not just put a cap on them".
Under the current launch aid scheme, European governments fund up to a third of the upfront costs of each new aircraft, with the money repaid in the form of royalties based on sales.
Financial Times 05/26/05
author: Edward Alden
(c) 2005 The Financial Times Limited.
The US warned yesterday that it would seek to force Airbus to repay billions of dollars in European subsidies if Washington and Brussels could not strike a deal that would bar all future government support for the aircraft manufacturer.
Peter Allgeier, the deputy US trade representative, told a congressional hearing he was pessimistic that such a deal could be reached, and said the US remained poised to take the dispute to the World Trade Organisation.
"It appears to me that at least some of the European member states remain convinced they need to provide launch aid to Airbus, and unless that attitude changes the prospects for a settlement are not high," Mr Allgeier said.
But he added that if the dispute went to the WTO the US would raise the bar by demanding not just an end to future subsidies but the "repayment of launch aid" for the jumbo A380 and the proposed A350.
Mr Allgeier said the US estimated that in total Airbus had received more than $15bn (€11.5bn, £8.3bn) in subsidies through upfront launch aid from France, Germany, Spain and the UK.
The threat may be difficult to carry out. If a WTO case went forward, it would be at least 18 months before a decision was reached, and the normal penalty provided for under WTO rules would be US tariff penalties against European imports.
In addition the EU would likely respond by seeking similar repayment of US government support for Boeing.
The tough US stand comes as the four European governments are weighing a request from Airbus to provide new launch aid for the A350, a proposed mid-sized competitor to Boeing's successful 787 long-range jet.
Airbus is pushing the governments to reach a decision by mid-June, which would allow for the A350 to be formally launched at the Paris Air Show, which begins on June 13.
The US has said it will take the dispute to the WTO immediately if the governments commit new launch aid for the A350.
Brussels has been hoping for a negotiated deal that would reduce the level of government support for both Airbus and Boeing, but would not abolish launch aid.
But Mr Allgeier said the US goal remained "to eliminate the subsidies, not just put a cap on them".
Under the current launch aid scheme, European governments fund up to a third of the upfront costs of each new aircraft, with the money repaid in the form of royalties based on sales.
