[Homestead] Battle of 150 billion dollar subsidies

Tvoivozhd tvoivozd at infionline.net
Thu Oct 7 12:30:31 EDT 2004


World <http://news.ft.com/world> / International economy 
<http://news.ft.com/world/economy> 	Print article 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> | 
Email article 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#>


Brussels hopeful of winning dispute against US
By Edward Alden and Caroline Daniel in Washington and Raphael Minder in 
Brussels
Published: October 6 2004 14:43 | Last updated: October 7 2004 12:22

World Trade Organization & AirbusThe European Union on Thursday said it 
was confident of winning a dispute against the US at the World Trade 
Organization over government subsidies for Airbus and Boeing, their 
flagship civil aircraft makers.


“We have carefully looked at the rules and we are confident that in this 
case... we have chances of winning it,” said Arancha González, the EU 
spokeswoman for trade.

The US and the European Union on Wednesday launched the biggest dispute 
in the history of the World Trade Organisation in an effort to end what 
each side said are massive subsidies to Boeing and Airbus.

In a dispute settlement case filed at the Geneva headquarters of the 
WTO, the US alleged that Airbus had received a total of at least $15bn 
in illegal "launch aid" from the France, UK, Germany and Spain, allowing 
it to overtake Boeing as the world's largest aircraft maker. The US also 
said it would terminate a 1992 bilateral agreement that had curbed but 
not ended subsidies, alleging minor violations by the EU.

	

Airbus and Boeing pose huge test for EU-US relations

Whether or not President George W. Bush is re-elected, Robert Zoellick 
and Pascal Lamy have handed their successors the biggest trade dispute 
that has ever faced the US and the European Union.

Go there 
<http://news.ft.com/cms/s/a2c2edca-17d1-11d9-9ac5-00000e2511c8.html>

The EU Commission responded immediately by filing a counter-case 
charging that Boeing had received about $23bn in prohibited subsidies 
since 1992 in the form of research and development assistance from US 
government agencies. The EU also challenged pledges from Washington 
state to offer about $3bn in tax breaks for Boeing production of its new 
7E7 jet.

Wednesday's moves raise the prospect of an unprecedented double ruling 
by the WTO, which could conclude that both aircraft makers have been 
receiving funding that contravenes WTO rules, and may authorise billions 
of dollars in trade retaliation.

Ms González said relations between Brussels and Washington would not be 
affected by the dispute and denied earlier remarks by EU officials 
arguing that the decision was driven by politics, with the US hoping to 
shore up President George W. Bush's re-election prospects and responding 
to charges from Democrat John Kerry that he has failed to enforce trade 
agreements.

Ralph Crosby, chief executive of the North American division of EADS, 
the parent company of Airbus, said he was "disappointed" by the action 
taken by the US government noting that it comes a month before the 
elections in the US. "It is rather a curious coincidence."

But US officials said the move was dictated by Boeing's commercial 
competition with Airbus. Boeing fears that the four European governments 
will offer new aid, in the form of loans repayable based on future 
sales, to allow Airbus to build a competitor to its 7E7 "Dreamliner" jet.

Boeing, which in the past had opposed a WTO case over fears it would 
anger its airline customers, said yesterday it supported the action. 
"Boeing will support any course of action the US government feels is 
necessary to reach a new agreement" that ends all subsidies, said Harry 
Stonecipher, Boeing chief executive.

US officials said they are still hoping for a negotiated solution over 
the next 60 days, the mandatory consultation period.

Robert Zoellick, US trade representative, said the US remains open to 
negotiating "an agreement that ends all new subsidies." But Pascal Lamy, 
the EU's trade commissioner, said: "The US move . . . is obviously an 
attempt to divert attention from Boeing's self-inflicted decline . . . 
If this is the path the US has chosen, we accept the challenge."

	Email article 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> 
EMAIL ARTICLE 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> 	 
Print article 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> 
PRINT ARTICLE 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> 	 
Most popular 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> 
MOST POPULAR 
<http://news.ft.com/cms/s/ea4b2a3a-179b-11d9-9ac5-00000e2511c8.html#> 
<http://ads.ft.com/event.ng/Type=click&Segments=3099,6198,6235,8535,9179,9556,9630,9631,10086,10102,10158,11057,11058,11059,11079,11353,11490,11506,11693,11950,12474,12638,12641,13043,13212,13319,13364,13432,13522,14052,15179,15545,15993,16156,16157&Targets=3099,7972,15407,6224&Values=30,51,63,77,84,94,102,150,165,166,639,658,931,1583,4570,4646,4704,5466,5633,6186,6224,8072&RawValues=&TargetID=7972&FlightID=8864&AdID=14011&Redirect=http:%2F%2Fwww.ft.com> 



Related stories
EU questions Japan’s financial aid for Boeing 
<http://news.ft.com/cms/s/10df643e-184d-11d9-8963-00000e2511c8.html> Oct 
7 2004 11:40

Airbus and Boeing pose huge test for EU-US relations 
<http://news.ft.com/cms/s/a2c2edca-17d1-11d9-9ac5-00000e2511c8.html> Oct 
6 2004 21:04

EU trade chief warns US on air subsidies 
<http://news.ft.com/cms/s/dcc453be-1638-11d9-b835-00000e2511c8.html> Oct 
4 2004 20:22Requires subscription

EADS in first US defence deal 
<http://news.ft.com/cms/s/9f83325c-1720-11d9-bbe8-00000e2511c8.html> Oct 
6 2004 14:43

EU warns Congress over trade sanctions 
<http://news.ft.com/cms/s/c1f6c338-133a-11d9-b869-00000e2511c8.html> Oct 
1 2004 00:56Requires subscription


		
Search <http://search.ft.com/search/index.html> & quotes 
<http://mwprices.ft.com/custom/ft-com/quotechartnews.asp>

	

News <javascript:selectRadio('n')> Quotes <javascript:selectRadio('q')> 	

    * Power search
      <http://search.ft.com/search/powerSearch_New.html>Requires
      subscription
    * My portfolio
      <http://mwportfolio.ft.com/custom/ft-com/portfolio/view.asp>



	Editor’s choice
		Airbus and Boeing pose huge test for EU-US relations 
<http://news.ft.com/cms/s/a2c2edca-17d1-11d9-9ac5-00000e2511c8.html>

EU trade chief warns US on air subsidies 
<http://news.ft.com/cms/s/dcc453be-1638-11d9-b835-00000e2511c8.html>Requires 
subscription

EADS in first US defence deal 
<http://news.ft.com/cms/s/9f83325c-1720-11d9-bbe8-00000e2511c8.html>

EU warns Congress over trade sanctions 
<http://news.ft.com/cms/s/c1f6c338-133a-11d9-b869-00000e2511c8.html>Requires 
subscription


	Site services <http://news.ft.com/siteservices>
		Personal office <http://ftoffice1.ft.com/VerifyCookie/NewVerifyCookie.asp>
Download news ticker 
<http://globalelements.ft.com/NewsAndAnalysis/Ticker/download-interface.html>
FT mobile <http://news.ft.com/mobile>
FT Research Centre <http://askft.ft.com/askFT/>
FT conferences <http://news.ft.com/ftconferences>
Currency converter <http://mwprices.ft.com/custom/ft-com/currency.asp>
Working at the FT 
<http://news.ft.com/cms/419e7cd4-8722-11d8-81c6-000e2511c801.html>


	Research tools 
<http://news.ft.com/cms/s/46698522-e45e-11d7-81c6-0820abe49a01.html>
		Analyst reports 
<http://custom.marketwatch.com/custom/ft-com/multex/?FTSite=FTCOM>
FT Research Centre 
<http://news.ft.com/FTCorporate/Site/html/uk/research/askft.html>
Free annual reports <http://ftcom.ar.wilink.com/asp/P002_search_eng.asp>
Market research <http://www.ft.com/marketresearchhome>
Growth companies <http://news.ft.com/growthcompanyinvestor>
D&B business reports 
<http://partners.dnbsearch.com/cgi-bin/writer.cgi/intlsearch.htm/BFT>


		





More information about the Homestead mailing list