U.S. Requests WTO Compliance Panel on EU’s Airbus Subsidies

The Obama administration requested that the World Trade Organization set up a compliance panel to deal with “inconsistent” subsidies from the European Union to airplane-maker Airbus SAS.

“The European Union’s aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue, which has cost American workers their jobs and hurt their families and communities,” U.S. Trade Representative Ron Kirk said today in an e-mailed statement.

The WTO ruled in June that the EU and four member nations provided more than $18 billion in subsidized financing to Airbus, according to the USTR statement. The WTO said the subsidies caused Chicago-based Boeing Co. to lose sales of more than 300 aircraft and market share, according to the statement.

The EU’s compliance report was submitted on Dec. 1 as part of the seven-year legal battle over aid to Airbus and Boeing, the world’s two biggest commercial planemakers. Kirk then said the EU had failed to halt government aid for Airbus to build aircraft, including the A380. The U.S. today requested an April 13 meeting of a WTO settlement body to discuss the issue.

“We regret that the U.S. has chosen to take this step, since the EU notified its compliance with its WTO obligations in the package of steps taken at the end of 2011, and the U.S. has yet to do the same in the Boeing case,” John Clancy, a trade spokesman for the EU, said today in an e-mailed statement.

WTO judges in March 2011 ruled that Boeing Co. (BA) subsidies from the U.S. and individual states damaged Airbus by more than $5.3 billion.

The U.S. and Europe filed counter-cases at the WTO in 2004 after the administration of President George W. Bush unilaterally walked out of a 1992 aircraft-aid accord with the EU. Toulouse, France-based Airbus, which had a record 1,419 orders in 2011 to extend its lead over Boeing, delivered 534 aircraft last year while its rival delivered 477.

To contact the reporter on this story: Eric Martin in Washington at emartin21@bloomberg.net

To contact the editor responsible for this story: Steve Geimann at sgeimann@bloomberg.net

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