Boeing Rejects EUs Offer To Negotiate An End To Trade Fight

The governments of the US and the European Union, in something of a surrogate war on behalf of Boeing and Airbus respectively, have both won findings in the World Trade Organization that some forms of government subsidy violate trade treaties. Now, a suggestion by Europe to negotiate an end to the battle has been called laughable by Boeing.

AFP News reports that on Monday, Boeing spokesman Charlie Miller told journalists the suggestion from Airbus that the differences could be settled through negotiation is "risible." He added the motive for the overture "is only too obvious when clearly they have lost."

An Airbus spokeswoman responded by noting that the US "offered to negotiate after unilaterally abandoning a 1992 agreement and demanding the EU abandon its reimbursable advance financing."

Europe claims that defense development contracts, and even local and state tax incentives to encourage the siting of new plants are illegal subsidies. The WTO agreed in March of last year with some of those charges, to the tune of $5.3 billion.

On the other side, the US attacked subsidies to Airbus, including government payments which were called loans, but for which repayment was waived, making them de facto grants. The illegal subsidies to Airbus as determined by the WTO totaled $18 billion.

The findings allow governments on both sides to levy tariffs or other sanctions to compensate for the imbalance. AFP reports a US source close to the situation says Washington is likely to seek WTO approval for sanctions against the EU "within the next few weeks."

FMI: www.wto.org