Boeing sees late August WTO ruling in Airbus case

Boeing sees late August WTO ruling in Airbus case
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First Published: Wed, Jul 22 2009. 05 35 PM IST
Updated: Wed, Jul 22 2009. 05 35 PM IST
Geneva: The World Trade Organisation (WTO) is likely to deliver a preliminary ruling in the US case against European Union (EU) launch aid for Airbus around the end of August, officials from rival Boeing said on Tuesday.
The ruling, to be followed about six months later by a decision in a countersuit brought by the EU over US support for Boeing airliners, would be a first attempt at resolving the multi-billion-dollar Transatlantic dispute.
“We trust both governments will take the WTO decision on board, and we will see the end of aircraft subsidies,” Boeing vice-president for government operations Ted Austell said.
The WTO panel of judges formed to examine the dispute in 2005 said last October that the case was so complex that it could not rule on it until some time this year.
Robert Novick, an attorney with law firm Wilmer Hale, who is an outside legal adviser to Boeing on the case, said the panel had advised the US and EU authorities that it hoped to give them an interim, confidential, ruling in the week of 31 August.
Launch aid
Both Austell and Novick said Boeing hoped that with a ruling imminent, EU governments would not provide further launch aid to Airbus, a subsidiary of EADS, for its new €11 billion ($15.63 billion) A350 airliner.
French and German ministers discussed possible government loans for the A350 at the Paris air show in June, and Britain has also made an offer of financing.
New US trade representative Ron Kirk has made it clear that Washington would challenge such aid at the WTO.
“We’re hoping the governments won’t do something precipitous before the WTO decision,” Novick told Reuters.
Boeing argues that the industry, in which governments play a big role, needs clarification over what counts as illegal subsidies, especially as new entrants such as Canada’s Bombardier and Chinese manufacturers are planning to compete in the long-haul aircraft market.
“Boeing and Airbus, the United States and the EU, have a shared interest. They want to make sure that as the industry expands there is sufficient clarity quickly as to what the rules of competition are going to be,” Austell told Reuters.
Many rulings in WTO disputes are mixed, and Novick conceded that decisions on some aspects of the case could go against the US government. But it is confident it will win on the main issue.
“No one is going to come away from the report unsure that launch aid is a subsidy,” he said.
With a first ruling approaching, there is little chance that the case will be resolved by negotiation.
Kirk and EU trade chief Catherine Ashton have met several times and agreed to try and settle some disputes bilaterally rather than through litigation. A long-running row over an EU ban on imports of US beef treated with hormones was settled in this way.
“They’ve had the opportunity to get together a couple of times... Our understanding is this matter was not part of the discussions,” Austell said.
In the first half of this year Airbus sold 90 planes, and received 22 cancellations. But that leaves it far ahead of Boeing, whose 85 new orders in the first half stand against 84 cancellations.
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First Published: Wed, Jul 22 2009. 05 35 PM IST
More Topics: Airbus | Boeing | Aviation | Airline | WTO |