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US wins 6th time in Airbus subsidies dispute with EU

Dec '19
Pic: Shutterstock
Pic: Shutterstock
A World Trade Organization (WTO) compliance panel has rejected EU's latest claims that it complied with WTO rules by making minor changes to its massive launch aid subsidies to Airbus.  The WTO recently valued the harm caused by these subsidies at $7.5 billion. This marks the sixth time that the WTO has found that EU subsidies to Airbus break WTO rules.
"The findings reaffirmed that the subsidies continue to cause adverse effects, and found further that European governments even extended the subsidies by renegotiating launch aid with Airbus.  Furthermore, the WTO panel found that this massive EU corporate welfare continues to cost American aerospace companies significant lost revenue," the office of the US trade representative (USTR) said in a press release.
“The findings confirm that, despite losing in five previous WTO reports, Europe remains more focused on generating meritless litigation than it is in addressing the massive subsidies to Airbus that continue to harm the US aerospace industry and its workers,” USTR said. “The EU’s frivolous case proves that strong action is needed to convince the EU that its interests lie in eliminating these market-distorting subsidies now and in the future, so that our industries can compete on a level playing field.”  
The latest WTO report marks the sixth time that the WTO has found that EU subsidies to Airbus break WTO rules. In this latest iteration, the EU tried yet again to show that minor changes to its Airbus subsidisation package were enough to eliminate the WTO inconsistencies identified in the past. The WTO panel again rejected all of these claims and instead found that European governments had extended the subsidies by renegotiating the launch aid in a way even more favourable to Airbus. As a result, the panel found that the subsidies caused the Boeing 777, 787, and 747 aircraft to lose sales and market share to Airbus—sales that would have meant more revenue for US producers and jobs for US workers.
As a result of the EU’s failure to address these subsidies, on October 18, the United States imposed tariffs of 10 percent on large civil aircraft and 25 percent on agricultural and other products, with the bulk of these tariffs being applied to imports from France, Germany, Spain, and the United Kingdom—the four countries responsible for the subsidies. In light of the latest report and the lack of progress in efforts to resolve this dispute, the United States is initiating a process to assess increasing the tariff rates and subjecting additional EU products to the tariffs, the USTR said.

Fibre2Fashion News Desk (RKS)

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