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US rejects EU allegations of illegal Boeing subsidies

United States shrugs off EU accusations of illegal subsidies to Boeing, makes counter allegation about EU financing of Airbus

AFP, Wednesday 26 Sep 2012
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The United States shrugged off on Wednesday European Union plans to take the US back to the World Trade Organization over illegal subsidies to aerospace giant Boeing, accusing the EU of far greater handouts.

"On the one side we have $90 billion (70 billion euros) of illegal financing of Airbus by the EU and on the other side we have $3.0-$4.0 billion for Boeing," said Michael Punke, US representative at the trade arbiter. 

The US ambassador said it was "no surprise" the EU wanted WTO consultations after Brussels claimed that Washington failed to meet a Monday deadline to end illegal subsidies to Boeing -- a measure imposed by the Geneva-based body in March.

"The process will follow its course," said Punke, adding that "many of the subsidies are still in place in the EU, especially those for the development of the Airbus 380.

"We have come into compliance and we believe Airbus has not," he told journalists.

US authorities said Sunday they had worked with the space agency NASA, the Defense Department, the northwestern state of Washington and Boeing's home city of Wichita, Kansas, to ensure conformity with the WTO ruling.

But the office of the EU's Trade Commission on Tuesday said there was a "lack of information in the US notification" and the EU review suggested "that the US has neither withdrawn the illegal subsidies granted to Boeing, nor removed their adverse effects."

"The EU even has indications that the US could have actually granted more illegal subsidies to Boeing in the meantime," the EU office added.

The EU said the WTO's Appellate Body had found that US federal and state governments granted $5.0-6.0 billion in WTO-incompatible subsidies to Boeing between 1989 and 2006.

Subsidies granted after this period "are estimated to be at least $3.1 billion," it added.

Under an agreement between Brussels and Washington, the two sides have 15 days to try and resolve the dispute, failing which the WTO can put in place a expert panel to examine the US measures to end subsidies.

Boeing and its European rival Airbus dominate the global aircraft business and have been at odds since 2004 over the issue of government subsidies, with both having won and lost complaints filed against the other at the WTO.

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