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EU: Boeing still benefits from subsidies

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Published 26 September 2012

American aircraft manufacturer Boeing is still getting US subsidies despite Washington's claim to have stopped the handouts, the European Union said yesterday (25 September) in the latest round of the world's biggest trade dispute.

The EU's claim came one day after the US Trade Representative's office said it had complied with a ruling by a World Trade Organisation dispute panel that found Boeing had benefited from illegal payments. The United States had until 23 September to comply.

"We had expected that the US would have finally complied in good faith with its international commitments and would have abided by the WTO rulings that clearly condemned US subsidies to Boeing", EU Trade Commissioner Karel De Gucht said in a statement.

"We are disappointed that this does not seem to be the case. So, the US leaves us with no other choice but to insist on proper compliance before the World Trade Organisation. We are confident that this process will finally lead to a level playing field in the aircraft sector."

A spokeswoman for the US Trade Representative's office said the United States was confident it has fully complied with the WTO ruling against US subsidies for Boeing, but was still studying the EU's claim it had not.

"Based on our initial review, the EU simply does not account for many of the changes announced by the United States. For example, the EU included programmes in its request that we made clear have been terminated," spokeswoman Andrea Mead said.

The US has set out very clearly how it had complied with the WTO ruling, and the numerous steps it has taken to insure full compliance, Boeing spokesman Charlie Miller said.

The US is still trying to stop European governments from subsidising Airbus, including so-called launch aid for the Airbus 350 jet, Miller said.

"There is a crystal clear ruling against launch aid subsidies, yet the European governments are continuing to provide illegal subsidies for development of the A350," Miller said. "The US government is pursuing the WTO processes necessary to bring an end to these subsidies and Boeing fully supports the actions that the government is taking."

The EU's latest complaint is likely to result in meetings between the two sides about the EU case against the US, Miller said. At the same time, compliance hearings on the US case are also taking place. "That is moving ahead rapidly," Miller said. "It is likely that the compliance panel will make a ruling in the next few months."

The EU's complaint is part of a seven-year trade battle over subsidies for Boeing and Airbus. Washington and Brussels have both won WTO rulings that the other paid illegal subsidies to its aircraft industry.

EurActiv.com with Reuters

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