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European Union

EU to Counter Sue US at WTO Over Aircraft Subsidy Dispute

Strategic Insights

— 1 min read

The European Union announced plans to countersue the United States at the World Trade Organization (WTO) in a long-standing dispute over government subsidies for aircraft makers Airbus and Boeing. The move comes after the US filed a case against Europe for allegedly subsidizing Airbus, a rival of Boeing in the passenger and cargo aircraft market. The EU's trade commissioner, Peter Mandelson, expressed disappointment over the US decision, saying it would be a "hard fought" dispute.

Key Takeaways:

  • The EU plans to countersue the US at the WTO over the aircraft subsidy dispute, which may harm global trade talks to reduce barriers.
  • The US initiated the lawsuit against the EU on Tuesday, arguing that subsidies to Airbus are illegal under WTO rules.
  • The EU claims that research and development support for Boeing falls within WTO rules, while the European loans for research and development for Airbus do not.
  • American officials say that European taxpayers, not the airline industry, bear the risk of loans for Airbus.
  • The EU and US reached a bilateral agreement in 1992 on how to subsidize and support their large civilian aircraft industries, but it expired due to the rise of Airbus as a competitor to Boeing.
  • The decision by the US to go to the WTO was described as "surprising and disappointing" by the EU, and the EU's trade commissioner, Peter Mandelson, warned that the dispute may distract global trade talks from making progress on reducing trade barriers.

Statistics:

  • The dispute over billions of dollars in subsidies received by both companies in the last 13 years may harm global trade talks.
  • The US argues that billions of dollars in research and development support for Boeing falls within WTO rules.
  • The European loans for research and development for Airbus do not meet WTO rules, according to the US.

Sources:

  • European Trade Commissioner Peter Mandelson

"European Union will countersue the United States at the World Trade Organization, EU trade commissioner says"

  • United States Trade Representative Richard Mills
  • "We're not surprised. It's been clear for some time that litigation would mean two cases"
  • European Union press release on textile imports from China
  • "On Friday, the European Commission started formal procedures to try to curb the sudden rise in Chinese textile imports"

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