Airbus takes final approach to settle 16-year WTO row with US | Business

Airbus takes final approach to settle 16-year WTO row with US | Business

Airbus has said it is taking the last step to end 16 years of bitter litigation with the US at the World Trade Organization (WTO) over subsidies that the White House said disadvantaged rival aerospace company Boeing.

The European aircraft manufacturer on Friday said it will end a system of financial support from France and Spain that the WTO had deemed illegal and unfair to Boeing.

The Trump administration used the case as justification to slap tariffs on EU exports worth $7.5bn. Airbus has discussed the litigation in recent months with representatives of the Scotch whisky trade whose single malt exports were targeted, as well as French wine producers and Spanish olive growers.

“After 16 years of litigation at the World Trade Organization, this is the final step to stop the long-standing dispute and removes any justification for US tariffs,” Airbus said.

The EU’s trade commissioner, Phil Hogan, said: “Unjustified tariffs on European products are not acceptable and, arising from the compliance in the Airbus case, we insist that the United States lifts these unjustified tariffs immediately.”

Boeing faces a parallel ruling from the WTO, due in September, that will determine how harshly the EU can retaliate over aid from the US to its aerospace champion.

The Airbus case centres on so-called “launch aid” from European countries for the development of the A350 twin-aisle plane and its larger cousin, the A380 superjumbo. WTO judges ruled the subsidies had impeded sales for rival aircraft from Boeing in the twin-aisle and very large aircraft markets, such as the 787 Dreamliner or the 747, the original superjumbo.

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Airbus said on Friday it had agreed to make changes to this system of financial support. It will increase interest payments owed to the French and Spanish governments on A350 planes it delivers from now on, meaning it will not pay back the aid in one lump sum, but the company declined to detail how much the change would cost.

A WTO official said the trade body hasn’t received any communication from the European Union on this matter, and declined to comment further.

Paul Everitt, chief executive of the UK aerospace lobby group, ADS, said: “A negotiated outcome to this long-running dispute would be the best outcome for the global aerospace industry. Tariffs disrupt healthy competition, reduce consumer choices and put jobs at risk unnecessarily.”

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