US Department of State says U.S. Ready To Return Airbus Case to World Trade Organization

The United States has warned that it is going to proceed “promptly� with a World Trade Organization (WTO) subsidy case against the European Union (EU) unless the Europeans change their position on aid for the development of new Airbus aircraft.

Testifying May 25 before a House of Representatives Transportation and Infrastructure subcommittee, Deputy U.S. Trade Representative Peter Allgeier said that a negotiated agreement on ending so-called launch aid and other trade-distorting aircraft subsidies would be preferable to litigation.

But he added that the Bush administration is “fully prepared� to move forward with the 2004 WTO case and believes it has a “very strong� case.

“It is up to the Europeans to decide if they are prepared to withhold launch aid while negotiating an agreement, or if they’d rather take their chances in a WTO dispute proceeding,� Allgeier said.

Subcommittee members pressed Allgeier to explain why the Office of the U.S. Trade Representative (USTR) delayed taking the subsidy issue to the WTO, thus giving Europe’s subsidized Airbus time to gain a competitive edge over its U.S. rival Boeing Company.

Allgeier replied that the U.S. aircraft industry had long favored a negotiated resolution of the dispute because of its commercial interests in Europe. But he said the administration is prepared to defend U.S. business interests if the other side does not show willingness to reach such an outcome.

“We won’t be dithering over what course to take,� he said.

He added that the United States is seeking a type of agreement that would not only stop launch aid but also require repayment of the aid that has already been provided.

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