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EU And US Go to WTO Over Airplane Subsidies

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The European Union is going to the World Trade Organization with its dispute with the United States over subsidies to Airbus and Boeing, said EU Trade Commissioner Peter Mandelson.

The EU is filing a complaint with the WTO claiming that Boeing gets illegal aid through military contracts. The U.S. on the other hand has already accused Airbus of getting illegal aid.

EU And US Go to WTO Over Airplane Subsidies

“In order to sustain conditions for fair competition in civil aircraft production and to maintain a proper commercial balance between the two companies, the European Union is resuming action in the WTO to confirm … the illegality of subsidies paid to Boeing,” said Mandelson.

The U.S. and EU have been having talks and trying to negotiate on this matter for months, trying to avoid this legal action with the WTO, but that changed yesterday when the U.S. backed out of the talks and went to the WTO. Now the EU has done what was expected and filed a counter complaint. AFX News Limited writes:

The simmering dispute over aid to Airbus and Boeing has become inflamed lately after Airbus requested UK government aid for its A350 long-haul plane designed to compete with Boeing’s planned 787 Dreamliner.

Mandelson added, however, that he will make all efforts to ensure the row does not damage broader trade relations between the EU and US.

“I can assure you Europe’s interests will be fully defended,” Mandelson said. He also said that he was “disappointed that the United States has chosen this confrontation with Europe.”

“America’s decision will, I fear, spark the biggest, most difficult and costly legal dispute in the WTO’s history,” he said, adding it would be “manifestly expensive and (involve) quite destructive litigation.”

According to U.S. Trade Representative Rob Portman, the Bush administration felt like it needed to act because EU member nations were preparing fund Airbus with $1.7 billion to Airbus to develop its A350.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.

EU And US Go to WTO Over Airplane Subsidies
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