U.S. begins sanctions process in Airbus dispute with EU

Fri Mar 30, 2012 1:00pm EDT
 
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By Doug Palmer

WASHINGTON (Reuters) - The United States said on Friday that European governments had failed to end illegal subsidies for aircraft manufacturer Airbus and so will be taking the first step at the World Trade Organization toward seeking sanctions on potentially billions of dollars of European goods.

"We refuse to stand by while American businesses and workers are disadvantaged," U.S. Trade Representative Ron Kirk said in a statement outlining Washington's intention to ask for a WTO panel to judge whether the European Union had complied with an earlier WTO ruling against government programs for Airbus.

"The European Union's aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue, which has cost American workers their jobs and hurt their families and communities," Kirk said.

The United States will formally submit its request at an April 13th meeting of the WTO Dispute Settlement Body.

It says the earlier WTO ruling shows European governments have provided more than $18 billion in subsidized financing for Airbus, a figure the European side disputes.

If the panel agrees the EU has not removed the offending subsidy programs, then Europe could face punitive duties on potentially billions of dollar of its exports to the United States.

Washington has already said it could seek as much $7 billion to $10 billion in sanctions. The process of obtaining WTO permission to impose retaliatory duties could take up to a year and the amount approved could be less than requested.

The WTO has also ruled that Boeing received some $3 billion to $4 billion in research grants and tax breaks.   Continued...

 
An Airbus A-319 jet liner lands at Moscow's Sheremetyevo airport March 28, 2012. REUTERS/Maxim Shemetov