US and EU Resume Talks to Resolve Airbus-Boeing Dispute

Strategic Insights -

The United States and the European Union have resumed talks in an attempt to resolve their long-standing dispute over government subsidies given to airplane manufacturers Airbus and Boeing Co. The negotiations come after a failed three-month negotiating period and warnings by the US government that it would resume its case at the World Trade Organization (WTO) if the EU provides new government loans to Airbus.

Key Takeaways:

  • The dispute began when the US lodged a complaint against EU subsidies to Airbus with the WTO in October 2004, triggering a counteraction from Europe against indirect US government aid to Boeing.
  • The two sides attempted to resolve the dispute through a three-month negotiating period in January 2005, but the talks failed to produce a settlement.
  • The US government warned in early April 2005 that it would resume its case at the WTO if the EU provides new government loans to Airbus.
  • The US and EU have agreed to resume talks in an effort to find a negotiated settlement, with open channels of communication between the two sides.
  • Rob Portman, US Trade Representative, and Peter Mandelson, EU Trade Commissioner, met to discuss the dispute and express a desire for a negotiated settlement.
  • The WTO cases brought by the US against the EU and the EU's case against the US were deferred in January 2005 pending the outcome of the negotiations.

Statistics:

  • The dispute over government subsidies to Airbus and Boeing has been ongoing since 2004.
  • The US complaint against EU subsidies to Airbus was lodged with the WTO in October 2004.
  • The two sides attempted to resolve the dispute through a three-month negotiating period from January to April 2005.
  • The US government has warned that it will resume its case at the WTO if the EU provides new government loans to Airbus.
  • The next day after the US announcement, the EU announced it would re-file its case against the US.

Sources:

  • Xinhua News Agency, "US, EU to Resume Talks to Resolve Airbus-Boeing Dispute" (Jun 17, 2005).
  • COMTEX, "US and EU Resume Talks on Airbus-Boeing Dispute" (Jun 17, 2005).