Airbus and Boeing Co get ready for Battle Royale |
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Thu, 21 Jul 2005 05:35
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GENEVA: The World Trade Organization has got itself involved and is now going to arbitrate in the biggest dispute ever, the supposed illegal subsidies allotted by US and the EU to Airbus and
Boeing Co, the biggest manufacturers of airplanes on either side of the Atlantic.
This is easily set to become the costliest and the most complicated event in the WTO's decade of existence. The WTO has now agreed to set up panels to look into the allegations of unfair advantage provided by the states to their respective aircraft makers.
Commenting on the formations of the two panels Fabian Delcros, a EU spokesman in Geneva said, "This case will be the most complicated case that the WTO has ever handled. We are not negotiating at this stage with the U.S.
We are proceeding with the dispute settlement procedure. But the communication channels remain open." These sentiments were echoed by the French Trade Minister Christine Lagarde who felt that until the last day they could keep on trying to negotiate with the US.
The dice was rolled by the US in October when it took the case of Airbus to the 148-member WTO. America's main grouse was against Airbus's A350 which is meant to directly challenge Boeing's 787 Dreamliner. Airbus was looking for financial help from EU member countries including France, Germany, Spain and Britain in this endeavour. The said countries are eager to subsidize the aircraft. But the US felt that Airbus had already benefited from the largesse offered by the EU and any further cost sharing would be illegal and infringe on the agreement signed by the two sides to limit aircraft subsidies.
A formal complaint in this regard was registered in May. Stung by the complaint, EU responded by filing a counter-claim stating that Boeing was being pushed ahead by massive subsidies both from state as well as federal governments. The EU claimed that this double-subsidy violated the spirit of the agreement.
The ball is now in the WTO's court, which finds itself, caught between the devil and the deep sea.
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