Sign in Subscribe
European Union

EU and US Trade Tensions Escalate as Deadline Expires

Strategic Insights

— 2 min read

European Union Trade Commissioner Peter Mandelson has criticized America's "onesided view over subsidies" as the deadline to resolve the row over support to aviation giants Boeing and Airbus expired. The 90-day negotiation period has failed to reach an agreement, and both sides may resort to legal action at the World Trade Organisation, leading to a prolonged period of commercial uncertainty for both companies. The EU has made an offer to keep negotiating, while the US has warned that new development subsidies for Airbus would trigger legal action. The dispute centers around the support provided to both companies by their respective governments, with the EU arguing that Boeing receives more significant aid.

Key Takeaways:

  • The 90-day negotiation period has expired, and the dispute remains unresolved, with both sides threatening legal action at the World Trade Organisation.
  • EU Trade Commissioner Peter Mandelson has accused the US of having a "onesided view over subsidies," stating that both Boeing and Airbus receive financial support from government sources.
  • The EU has made an offer to keep negotiating, but the US has warned that new development subsidies for Airbus would trigger legal action.
  • Airbus is expected to seek £850 million in investment from European governments to support the launch of its new A350 model, which would likely spark legal action by the US unless an agreement is reached.
  • The dispute centers around the support provided to both companies by their respective governments, with the EU arguing that Boeing receives more significant aid.
  • US officials have stated that they would not take the case back to the WTO unless Europe launches new development subsidies for Airbus.
  • Talks stalled on the US insistence that the EU halt "risk sharing" investment in new models under which Airbus does not have to repay government money if its plane is a commercial failure.
  • The EU claims that Boeing receives similar aid, including £850 million granted by Japan to build the wings for Boeing's new 787.

Statistics:

  • £850 million: The amount of aid Airbus is expected to seek from European governments to support the launch of its new A350 model.
  • 90 days: The length of the negotiation period that has expired without a resolution to the dispute.
  • 2010: The projected year of service for Airbus's new A350 model.
  • £850 million: The amount of aid granted by Japan to Boeing to build the wings for its new 787.

Sources:

  • "Peter Mandelson attacks US over 'onesided' subsidies view" by The Telegraph
  • "EU and US fail to agree on Airbus-Boeing subsidies" by Bloomberg
  • "Airbus and Boeing row escalates over subsidy plans" by The Times

Read more