The U.S. Trade Representative is studying steps the European Union (EU) says it has taken to comply with last spring’s World Trade Organization (WTO) determination that certain EU subsidies to are illegal under international trade rules.
The U.S., the EU,and Airbus all weighed in on the matter, but the report detailing the steps Europe is taking had not been made public by Thursday evening. The EU’s deadline for complying with the ruling was Thursday.
In May, the WTO Appellate Body upheld much, but not all, of a 2010 report that found that certain subsidies provided by the EU and member states Germany, France, Spain and the U.K. were incompatible with WTO trade rules because they “caused serious prejudice” to the interests of the U.S.
“We will base our next steps on a careful evaluation of the announcement, and whether it demonstrates that the EU has in fact take the steps necessary to bring itself into full compliance with the WTO,” U.S. Trade Representative Ron Kirk said. “The United States intends to ensure that our valued trading partner, the EU, keeps its commitments in this and all other trade matters,” he said in a prepared statement.
The EU said its package of actions “achieves full compliance” with the WTO recommendations and rulings in the case. “Through this package, we address all categories of subsidies, all forms of adverse effects, and all models of Airbus aircraft covered by the WTO rulings,” said spokesman John Clancy.
A separate case brought by the EU against the U.S. over alleged subsidies to Boeing still is under consideration by the WTO Appellate Body, with a ruling now expected next year. Both the EU and Airbus took pains Thursday to point out that the U.S. could find itself in the same situation once decision is handed down. “At that point, the EU expects to receive an equally solid set of compliance actions from the United States,” said Clancy.
While the EU described its compliance report as a “comprehensive package of actions,” Airbus insisted that Europe needs to make only “limited changes in European policies and practices” to comply with the Appellate Body report, which the OEM describes as a “decisive victory for Europe.”
Boeing said, “We expect Airbus and its government sponsors to demonstrate that the practice of market-distorting launch aid–the most pernicious form of subsidy Airbus was found to have received–has ended.
During an unrelated media briefing in Washington, Airbus COO-Customer John Leahy said, “It is clear the U.S. is supporting its aeronautics industry and Europe is supporting its. We need to find a way to do this reasonably.”