A vs. B questa volta si fa sul serio

[marcogiov]

US and Europe launch subsidies battle
By Edward Alden and Caroline Daniel in Washington and Raphael Minder in Brussels
Financial Times
Published: October 6 2004 14:43 | Last updated: October 6 2004 19:23

The US and the European Union on Wednesday launched the biggest dispute in the history of the World Trade Organisation in an effort to end what each side said are massive subsidies to its flagship civil aircraft makers, Boeing and Airbus.

In a dispute settlement case filed at the Geneva headquarters of the WTO, the US alleged that Airbus had received a total of at least $15bn in illegal "launch aid" from the France, UK, Germany and Spain, allowing it to overtake Boeing as the world's largest aircraft maker. The US also said it would terminate a 1992 bilateral agreement that had curbed but not ended subsidies, alleging minor violations by the EU.

The EU Commission responded immediately by filing a counter-case charging that Boeing had received about $23bn in prohibited subsidies since 1992 in the form of research and development assistance from US government agencies. The EU also challenged pledges from Washington state to offer about $3bn in tax breaks for Boeing production of its new 7E7 jet.

Wednesday's moves raise the prospect of an unprecedented double ruling by the WTO, which could conclude that both aircraft makers have been receiving funding that contravenes WTO rules, and may authorise billions of dollars in trade retaliation.

EU officials charged that the decision was driven by politics, with the US hoping to shore up President George W. Bush's re-election prospects and responding to charges from Democrat John Kerry that he has failed to enforce trade agreements.

Ralph Crosby, chief executive of the North American division of EADS, the parent company of Airbus, said he was "disappointed" by the action taken by the US government noting that it comes a month before the elections in the US. "It is rather a curious coincidence."

But US officials said the move was dictated by Boeing's commercial competition with Airbus. Boeing fears that the four European governments will offer new aid, in the form of loans repayable based on future sales, to allow Airbus to build a competitor to its 7E7 "Dreamliner" jet.

Boeing, which in the past had opposed a WTO case over fears it would anger its airline customers, said yesterday it supported the action. "Boeing will support any course of action the US government feels is necessary to reach a new agreement" that ends all subsidies, said Harry Stonecipher, Boeing chief executive.

US officials said they are still hoping for a negotiated solution over the next 60 days, the mandatory consultation period.

Robert Zoellick, US trade representative, said the US remains open to negotiating "an agreement that ends all new subsidies." But Pascal Lamy, the EU's trade commissioner, said: "The US move . . . is obviously an attempt to divert attention from Boeing's self-inflicted decline . . . If this is the path the US has chosen, we accept the challenge."



Airbus and Boeing pose huge test for EU-US relations
By Edward Alden and Raphael Minder
Financial Times
Published: October 6 2004 21:04 | Last updated: October 6 2004 21:04


For the past four years, Robert Zoellick, the US trade representative, and his European counterpart Pascal Lamy have prided themselves on their skilful management of the world's largest bilateral trading relationship.

But with Mr Lamy on his way out this month and Mr Zoellick likely to follow next year whether or not President George W. Bush is re-elected, they have handed their successors the biggest trade dispute that has ever faced the US and the European Union.

The fight pits Boeing, once the world's biggest civil aircraft maker and still the biggest US exporter, against Airbus, the European giant which last year overtook Boeing and captured 54 per cent of the global market for large aircraft sales.

The US says it is determined to prevent Britain, France, Germany and Spain providing any more aid to Airbus, arguing that past subsidies in the form of up-front launch aid have given Airbus a risk-free source of capital that is allowing it to undercut Boeing worldwide.

After unsuccessful efforts to negotiate a bilateral deal to halt this aid, the US said on Wednesday it would attempt to force a solution through the World Trade Organisation. The EU, as it had promised, immediately filed a counter-case.

Trade experts say the WTO is utterly unsuited to deal with a dispute on this scale, both because of the complexity of some of the issues and the huge commercial stakes on either side.

"I think this is a mess," said Claude Barfield of the American Enterprise Institute. "They should move heaven and earth to settle it." Earlier this week, Peter Mandelson, who is to replace Mr Lamy as trade commissioner in November, pleaded with the US to keep the disagreement "out of the WTO net".

Brussels officials have been taken aback by the dispute's rapid escalation. On Wednesday they insisted the timing of the US complaint was proof it was politically driven, coming in the midst of the presidential television debates. While trade has not figured prominently in the election campaign, the case should help insulate Mr Bush against charges from John Kerry, the Democratic candidate, that his administration is not aggressive in enforcing trade agreements.

A Brussels official said Mr Zoellick's agenda for co-operation with Europe had been hijacked by the presidential campaign. "There is another debate coming up on Friday and there is no doubt that the Bush team need more ammunition at this stage," the official said.

But the US vehemently denies that election-year politics is driving the dispute. Instead, it says the US must act now to prevent Europe subsidising an aircraft to compete with Boeing's 7E7 "Dreamliner", a mid-sized, fuel-efficient carrier that has seen strong early orders.

"They like the status quo and it's convenient for them to write this off as nothing more than election-year politics in the US," said a senior US trade official. "What is driving this is the substance and the substance here is that they are looking at a new tranche of subsidies."

Once launch aid has been pledged to an Airbus competitor to the 7E7", he said, "the horse is out of the barn".

The dispute will create uncertainty not only for the world's two largest aircraft makers but also for a host of suppliers, often working for both companies, and for the world's airlines.

And neither side has much sense of where it will lead. Already the fight is spilling over into a separate dispute over a US corporate tax subsidy, with the EU signalling it will not lift existing trade sanctions against the US even if Congress acts this week to phase out the subsidy. Boeing, it noted in a release on Wednesday, gets about $200m (€163m, £318m) each year from the tax break.

The history of similar disputes is not encouraging. In 1996, Canada and Brazil each filed WTO cases to block government subsidies to Embraer and Bombardier, their regional aircraft makers. Each won, and each threatened to launch more than $3bn in trade retaliation, more than enough to cut off all Canada-Brazil trade. Neither side pulled the trigger.

If a negotiated deal cannot be reached, the Boeing-Airbus dispute could result in trade retaliation threats that dwarf that amount. Is Washington prepared for that? "We will cross that bridge when we come to it," the US official said.

[I-DAVE]

Mi piacerebbe proprio vedere da chi sarà composta la giuria del WTO che si pronuncerà di questo "processo". Per essere equa dovrebbe essere composta da: Mayotte, Vanuatu, Indonesia e Mongolia... la cosa più divertente sarà che, se giunti ad una sentenza positiva per gli US e gli stati membri dell'EU non dovessero sottostare alle indicazioni del WTO (per lo statuto del WTO la sentenza non avrebbe nessun valore ingiuntivo), il risultato sarà la ritorsione legittima (sempre secondo le regole del WTO) degli US, nei confronti di prodotti dell'UE, compresi quelli di quei paesi che non sono direttamente coinvolti nel consorzio Airbus (se la cosa sarà fatta con poca ratio, come probabilmente sarà -vino, formaggi e auto li produciamo pure noi...).

Per inciso, credo che abbiano torto entrambi, di finanziamente (illeciti e al limite della legalità), ne ricevono tutt'e due... sta di fatto che un settore dispendioso nel ramo R&D come quello aerospaziale è impensabile che si regga da solo sulle sue gambe senza il supporto di commesse statali o aiuti alla ricerca di derivazione pubblica.

DaV

[kernel]

Ma si alla fine si mettono daccordo. Anche per i contratti ventennali stavano per scannarsi eppure...

[marcogiov]

Brussels hopeful of winning dispute against US
Financial Times
By Edward Alden and Caroline Daniel in Washington and Raphael Minder in Brussels
Published: October 6 2004 14:43 | Last updated: October 7 2004 12:22

The European Union on Thursday said it was confident of winning a dispute against the US at the World Trade Organization over government subsidies for Airbus and Boeing, their flagship civil aircraft makers.

“We have carefully looked at the rules and we are confident that in this case... we have chances of winning it,” said Arancha González, the EU spokeswoman for trade.

The US and the European Union on Wednesday launched the biggest dispute in the history of the World Trade Organisation in an effort to end what each side said are massive subsidies to Boeing and Airbus.

In a dispute settlement case filed at the Geneva headquarters of the WTO, the US alleged that Airbus had received a total of at least $15bn in illegal "launch aid" from the France, UK, Germany and Spain, allowing it to overtake Boeing as the world's largest aircraft maker. The US also said it would terminate a 1992 bilateral agreement that had curbed but not ended subsidies, alleging minor violations by the EU.

The EU Commission responded immediately by filing a counter-case charging that Boeing had received about $23bn in prohibited subsidies since 1992 in the form of research and development assistance from US government agencies. The EU also challenged pledges from Washington state to offer about $3bn in tax breaks for Boeing production of its new 7E7 jet.

Wednesday's moves raise the prospect of an unprecedented double ruling by the WTO, which could conclude that both aircraft makers have been receiving funding that contravenes WTO rules, and may authorise billions of dollars in trade retaliation.

Ms González said relations between Brussels and Washington would not be affected by the dispute and denied earlier remarks by EU officials arguing that the decision was driven by politics, with the US hoping to shore up President George W. Bush's re-election prospects and responding to charges from Democrat John Kerry that he has failed to enforce trade agreements.

Ralph Crosby, chief executive of the North American division of EADS, the parent company of Airbus, said he was "disappointed" by the action taken by the US government noting that it comes a month before the elections in the US. "It is rather a curious coincidence."

But US officials said the move was dictated by Boeing's commercial competition with Airbus. Boeing fears that the four European governments will offer new aid, in the form of loans repayable based on future sales, to allow Airbus to build a competitor to its 7E7 "Dreamliner" jet.

Boeing, which in the past had opposed a WTO case over fears it would anger its airline customers, said yesterday it supported the action. "Boeing will support any course of action the US government feels is necessary to reach a new agreement" that ends all subsidies, said Harry Stonecipher, Boeing chief executive.

US officials said they are still hoping for a negotiated solution over the next 60 days, the mandatory consultation period.

Robert Zoellick, US trade representative, said the US remains open to negotiating "an agreement that ends all new subsidies." But Pascal Lamy, the EU's trade commissioner, said: "The US move . . . is obviously an attempt to divert attention from Boeing's self-inflicted decline . . . If this is the path the US has chosen, we accept the challenge."