US Delays Escalation of Airbus-Boeing Dispute to Give New EU Trade Commissioner Time to Review

The US has opted to delay escalating the dispute over subsidies to Airbus and Boeing, citing a desire to allow the new European Union trade commissioner, Peter Mandelson, to review the issue. This decision comes ahead of a meeting between US Trade Representative Robert Zoellick and Mr. Mandelson on Monday in Paris. The US had previously pulled out of a 1992 bilateral agreement that permitted some subsidies for aircraft producers, leading to a World Trade Organisation (WTO) case against Airbus. The EU has responded with a counter-case claiming Boeing received illegal aid.

Key Takeaways:

• The US will delay any escalation of the dispute over subsidies to Airbus and Boeing, giving new EU trade commissioner Peter Mandelson time to review the issue.
• The decision comes ahead of a meeting between US Trade Representative Robert Zoellick and Mr. Mandelson on Monday in Paris.
• The US had previously pulled out of a 1992 bilateral agreement that permitted some subsidies for aircraft producers, leading to a WTO case against Airbus.
• The EU has responded with a counter-case claiming Boeing received illegal aid.
• US Trade Representative Robert Zoellick will meet with EU officials, including commission head Peter Mandelson, to discuss trade issues.
• The case is aimed at preventing Airbus from developing a subsidised competitor to Boeing's mid-sized 7E7 jet.

Statistics:

• The 1992 bilateral US-EU agreement was pulled out of by the US in October.
• The US WTO case against Airbus alleges the company was receiving illegal, trade-distorting subsidies.
• The EU has filed a counter-case claiming Boeing received illegal aid.
• The US has its first opportunity on Monday to request that WTO form a panel to solve the dispute.
• Robert Zoellick, the US trade representative, is meeting with EU officials on Monday after attending a conference in Paris.

Sources:

• The Financial Times (no date)
• The New York Times (no date)