Airbus A380 loans faulted in WTO ruling on airplane subsidies
European loans to planemaker Airbus SAS broke commerce rules, a World Trade Organization panel found, backing at least part of a U.S. complaint in the first round of the biggest dispute ever before the global arbiter, two people familiar with the ruling said.
Washington Democratic Senator Maria Cantwell said it was a "great day" for Boeing Co. and workers in her state, citing news accounts that the U.S. won a case against aid given to Airbus SAS.
Cantwell commented today in an e-mailed statement. The Wall Street Journal reported that the world trade arbiter found in a preliminary ruling that Airbus received illegal subsidies from European Union governments.
The ruling, in a document more than 1,000 pages long, says Airbus got some illegal subsidies in form of development loans from France, Germany, the U.K. and Spain at least on the A380 superjumbo, according to the people, who declined to be named because the judgment isn't public. Europe has six months to respond, and appeals may prolong a final decision to 2012.
The draft decision hands Chicago-based Boeing Co. ammunition to fight aid slated for Airbus's new A350 model that will challenge Boeing in a market estimated at more than 3,000 planes over two decades. The five-year dispute, initiated by the U.S., involves dueling complaints over alleged unfair help, with a ruling on Europe's counterclaim due in about six months.
"The American side will certainly try to make the best out of this decision," said Hugo Paemen, a former EU ambassador to the U.S., by telephone from Brussels before today's ruling. "But this is a situation that has been overtaken by events, given the economic crisis and government interference in a great number of sectors."
The A380, launched in 2000, is a 550-seat plane that began service in 2007 with Singapore Airlines Ltd. Airbus so far has won about 200 orders for the plane from 16 customers. It delivered 12 planes last year and is scheduled to hand over a total of 14 this year.
At stake is the competition between the U.S. and Europe in the $70 billion global airliner market. The amounts challenged dwarf all other cases that have gone before the Geneva-based trade arbiter. Because the WTO ruling only covers past aid, the European Union signaled last week governments will press ahead with funding for the A350, regardless of today's judgment.
"It would be almost ridiculously arrogant for the EU to say that they would continue to provide aid irrespective of whatever ruling the WTO might make," U.S. Trade Representative Ron Kirk said today in an interview before the ruling.
The U.S. started the WTO dispute in 2004, prompting the EU to file a counter-complaint. By the time a final decision may have been reached in 2012, European governments may have paid out 3.3 billion euros ($4.7 billion) more in loans that they've promised for Airbus'