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June, 2018 1:47 PM



EU tries new tack at WTO to defend Airbus subsidies

EU tries new tack at WTO to defend Airbus subsidies

The EU wants fresh talks with Washington at the World Trade Organization to prove that it has brought Airbus subsidies into line with global trade rules, the WTO said Wednesday.

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07.06.2018 05:27 PM

The EU wants fresh talks with Washington at the World Trade Organization to prove that it has brought Airbus subsidies into line with global trade rules, the WTO said Wednesday.

"The European Union has requested WTO dispute consultations with the United States," it said in a statement.

The request, which was filed with WTO's Dispute Settlement Body (DSB) on May 28, aimed to "address the EU's claim that the EU and its member states have complied with the WTO ruling on subsidies to Airbus," the statement said.

The request comes after the DSB's appellate division last month ruled that the EU had failed to remove its illegal Airbus subsidies, handing a major victory to the United States and its national aviation giant Boeing in a multi-facetted dispute that has raged for 14 years.

That decision is not subject to appeal and cleared the way for Washington to seek billions of dollars in retaliatory tariffs against European exports.

However, the EU has with its request for consultations taken the rare route of launching a new and separate process before the DSB aimed at proving compliance.

This so-called 21.5 proceeding, which could take years, has been used in the past by Washington in a dispute with Mexico over tuna labelling, and by the EU in a dispute with Russia over pork imports.

The new process does not suspend Washington's right to seek retaliatory tariffs, but so far it has not taken the necessary step of asking the WTO to determine the appropriate amount. 

In principle, the US must respond to the EU's request within 10 days, and the consultations, which happen behind closed doors, must begin within a month.

If the consultations fail to bring the two sides to the same page, they can request that a WTO panel of experts decide the matter.

The original dispute dates to 2004, when the US argued that the support offered to Airbus by the EU as well as the governments of Britain, France, Germany and Spain breached WTO rules. 

In 2011, the WTO ordered Brussels and those countries to withdraw certain support and subsidy programmes. 

The EU appealed against that decision in 2016, but was handed last month.

Brussels has meanwhile won a series of victories in its own case against the United States and Boeing.
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