Trade war

The ongoing transatlantic aircraft dispute between the United States and the European Union - considered to be the world's largest trade fight - appears far from over.

After reviewing the EU's December 1 filing with the World Trade Organization, US trade officials have claimed the Europeans have not only failed to comply with the WTO's ruling to eliminate subsidies to Airbus but have even provided new subsidies to the aircraft manufacturer.

US Trade Representative Ron Kirk said in a statement that the US government would seek to consult with the EU over the matter. But he warned that the government has already asked the WTO to impose "countermeasures," or trade sanctions, that could amount to between $7 billion (5.2 billion euros) to $10 billion.

Seven-year trade dispute

The move by Washington, which is keen to defend rival US aircraft manufacturer Boeing, marks a low point in a seven-year trade dispute centered on European aid for Airbus aircraft. Boeing has seen its world-leading position eclipsed in recent years by Airbus, a unit of the European Aeronautic Defence and Space (EADS) company.

"In June 2010, the WTO ruled that EU nations including France, Germany, Spain and the United Kingdom provided illegal subsidies to Airbus in the form of loans, infrastructure support and equity infusions.

"The WTO clearly found that every single grant of launch aid to Airbus, for every single aircraft that the company produced, was a WTO-inconsistent subsidy that caused unfair adverse effect to US industry and jobs," Kirk said in a statement.

"The United States cannot accept anything less than an end to this subsidized financing."

In its own statement, Airbus called the push for sanctions "an empty claim," arguing that it had delivered the Geneva-based trade body "a comprehensive package of actions that achieves full compliance."

Separate ruling

A WTO comment on the US complaint is not expected before December 19, when the organization's dispute settlement body is scheduled to meet.

Next year, a WTO panel will review a separate ruling that the US has illegally given subsidies to Boeing.

Following that decision, the two sides could negotiate a deal to settle a trade war involving up to $4 trillion in airplane sales over 20 years.

Author: John Blau (Reuters, AFP)
Editor: Martin Kuebler