Boeing-Airbus Rift Heading to WTO

The U.S. will request that a WTO dispute-settlement panel be set up, U.S. Trade Representative Rob Portman said in a statement on his office´s Web site. The decision means that the Boeing-Airbus spat will likely become the biggest litigation before the WTO, an organization that develops ground rules for international commerce and mediates trade disputes.

Each side claims the other is illegally subsidizing its own domestic industry to maintain market share and jobs. The U.S. has said Airbus has received $15 billion in subsidies, while the European Union counters that Boeing has received $23 billion in special favors.

Under the terms of that deal, the EU agreed that it would make no new government support commitments for the development or production of aircraft.

The agreement lapsed in April, and Airbus said in May that it expects four European governments to grant so-called launch aid for its A350 aircraft by mid-June.

In an effort to avoid a WTO showdown, EU Trade Commissioner Peter Mandelson made a new proposal to the U.S. to cut government aid.

However, the U.S. is demanding “an immediate halt” to any EU launch-aid plans and a recommitment to ending subsidies for Airbus completely.

“We still believe that a bilateral negotiated solution is possible,” said Portman, who noted that out of the 100 concluded WTO cases involving the U.S. since the organization was founded, more than one-third were satisfactorily resolved following negotiation. “But the negotiations won´t succeed unless the EU recommits to ending subsidies.”