| Airbus requests another loan from EU; US not best pleased |
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Washington: The conflict between rival aircraft makers Boeing and Airbus appears to turn into a long drawn battle now involving the WTO which seems torn between both sides. Airplane maker Airbus which launched the world’s biggest passenger plane last month, receives continuing subsidies and loans from the European Union - a situation that is seen as a commercial threat to American plane maker Boeing.
Last week, the US objected when Airbus requested Great Britain for loans to develop the twin-engine A350. The US warned that it would once again bring in the WTO to intervene in the matter.
A spokesperson for the US Trade Representative’s office said that if the EU commits additional subsidies to Airbus, then “we will resume litigation through the WTO and that remains our position.”
As a conciliatory effort, in January, the EU and the US had suspended competing WTO cases over government aid for both the airplane makers. However the two disputing factions of the WTO failed to reach a settlement by its April deadline.
While the US claims to be seeking a more level playing, the EU is of a different opinion. Boeing has reason to feel threatened by Airbus’ business ranking as the world’s biggest commercial aircraft maker. Airbus is hugely favoured by budget airlines as the fiercely competitive pricing battle rages on unabated, in contrast to rising fuel costs.
Boeing was in the meanwhile enjoying Japanese support. The Japanese government provides the sub-assemblies of the wing and fuselage of Boeing aircraft.
In an earlier ruling, the WTO pointed out that Boeing was enjoying tax breaks which the WTO ruled as illegal export subsidy.
The US TR spokesperson maintained that the US will continue to negotiate for an agreement on eliminating subsidies to the aircraft manufacturer.
Posted
on : Tue, 24 May 2005 13:25 GMT | Business News
By : Mike Lawson
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