EU Details Steps Taken To Comply In Airbus Case

December 3, 2011

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The European Union spelled out 36 steps it had taken to comply with a ruling by a panel of the WTO's dispute settlement body (DSB) after the United States complained about subsidies EU countries gave to Airbus.

Among the steps taken to meet the WTO's December 1 compliance deadline, it cited repayment by Airbus of EUR€1.7 billion (USD$2.29 billion) of state financing.

"As a result of this review, the European Union has adopted a course of action that addresses all forms of adverse effects, all categories of subsidies, and all models of Airbus aircraft covered by the DSB's recommendations and rulings," the EU said in the six-page compliance document.

The EU said its actions would impact all categories of subsidy covered by the WTO ruling: capital contributions, infrastructure support, regional aid and loans from Germany, France and Spain.

Loans from France, Germany and Spain would be paid back, fees and lease payments would rise to bring infrastructure support into line with market principles, and capital contributions and regional aid had "come to an end", the EU said.

Six Airbus models would be affected: the A300, A310, A320, A330, A340 and A380, as well as their derivatives.

The case against Airbus is one half of the world's biggest trade row.

In the other half, the EU has brought a similar complaint at the WTO against US handouts to Boeing.

The office of US Trade Representative Ron Kirk received the EU's compliance report on Thursday but has yet to say whether it is satisfied by the steps taken by the EU, requesting time to examine the EU's actions.

A USTR spokeswoman declined to comment after the EU published the document on Friday, saying the report was still being evaluated. A Boeing official also declined to comment.

But trade experts doubt the EU actions will satisfy the United States, which could bring retaliatory action. Airbus said on Thursday that the WTO's ruling needed only minor policy changes by the EU, but a US industry source described that claim as "laughable".