Victory for Boeing as WTO rules Airbus subsidies unfair
01 Jul 2010
The United States won an ''important victory'' in a World Trade Organisation ruling that Airbus, the European plane maker, had benefited from four decades of improper subsidies, taking sales from Boeing as a result.
The ruling is the latest twist in a long-running dispute. Boeing, based in Chicago, has long contended that the subsidies helped Airbus vault past it in 2003 to become the world's largest plane maker. The US lodged a complaint with the WTO six years ago, but the decision has only now been made public.
The 1,200-page ruling concluded that Airbus received subsidies - in the form of loans from European governments at below-market interest rates - to produce its six best-selling models. The trade panel recommended that steps be taken to withdraw the subsidies or nullify their effects.
From the start of its first A300 jet in 1969, with interest-free financing from France and Germany, to the creation of its new A380 superjumbo jet, the trade panel concluded that it ''would not have been possible for Airbus to have launched all of these models, as originally designed, and at the times it did'', without the subsidies.
The ruling said that if the European company had had to rely on commercial financing, at interest rates as high as 15 to 16 percent in the early years, ''the increase in the level of debt Airbus would have accumulated over the years would have been massive''. It said Airbus would have been a ''much weaker'' company and probably could not have afforded to build the A380.
The ruling, which was outlined in broad terms in March but not released fully until Wednesday, found that the Airbus A310, A320, A330 and A340 models were also developed largely with low-interest government loans.
