The European Union said Thursday it is asking the World Trade Organization to impose up to $12 billion per year in sanctions on the United States as part of a long-running dispute involving government subsidies to plane-makers Airbus and Boeing.
The EU said in a statement that the amount was “based on estimates of the damages suffered by the EU due to unfair and biased competition from the U.S. industry,” which received U.S. government subsidies.
The action marks the latest salvo in a seven-year dispute between the EU and the U.S. over subsidies to the two plane-makers.
Officials from France, where Airbus is based, welcomed the EU’s decision.
“The aerospace companies need to have a level playing field in international competition,” Foreign Trade Minister Nicole Bricq and Transport Minister Frederic Cuvillier said in a statement. “This conflict has gone on too long now. We must put an end to it and restore fair competition. It is important for Europeancompanies and jobs.”
An Airbus spokesman also praised the EU decision.
“But this is nothing other than the next step in a trade dispute initiated in 2004 by Boeing. ...” Maggie Bergsma said. “We regret that Boeing continues a legal battle that could have been resolved a long time [ago] by mutual agreement.”
A spokesman for Boeing said the company had no immediate reaction to the EU’s decision to seek sanctions, but referred to a statement the company made Sunday when the U.S. issued a statement saying it had complied with the WTO ruling in the case.
The Boeing statement then endorsed the U.S. government statement and sharply criticized Europe and Airbus.
While the U.S. had complied, the statement said, “the same cannot be said of Airbus and its government sponsors, which have thumbed their noses at the WTO. Despite a crystal clear ruling against launch aid subsidies, European governments have continued the practice by providing Airbus with billions of taxpayer euros and pounds for its next new product, the A350. What is more, the European governments have yet to remove the very substantial subsidies, including those propping up the A380, which the WTO’s ruling in June of last year requires them to do.”
Boeing Co. and Airbus are fighting over a market believed to be worth more than $3 trillion over the next decade. The WTO has found fault on both sides.
In March, a WTO appeals panel upheld an earlier finding that Boeing received at least $5 billion in subsidies that hurt its European rival and were prohibited under international trade rules. The amount, though, was far less than the European Union had alleged in its complaint.
On Monday, the U.S. claimed it had complied with that ruling by stopping some payouts to Boeing through NASA and the Pentagon and by removing some beneficial tax and funding policies.
The EU has rejected those claims.
Still, it has not emerged unscathed from the dispute, either. A WTO panel has ruled that European governments provided $18 billion in subsidies to Airbus, though not all were deemed illegal.
Business, Pages 28 on 09/28/2012