US aerospace giant Boeing lashed out on Monday at Germany’s plans for a multibillion-dollar loan to develop Airbus’s A350 airliner, ahead of a WTO ruling on EU aid to its European arch-rival.
With a final WTO ruling on US accusations of unfair EU subsidies expected as early as yesterday, Boeing criticized the German government’s move to provide 1.1 billion euros (US$1.49 billion) toward the development of the A350.
“On the eve of such an important decision, it is unfortunate and disappointing to see news reports quoting a senior German official saying that Germany is prepared to provide 1.1 billion euros for the development of the Airbus A350 — a move that flies in the face of both the expected WTO decision and the rules-based global trading system we’ve all endorsed,” Ted Austell, vice president of Boeing’s executive, legislative and regulatory affairs, said in a statement.
A senior German economic ministry official said on Sunday that the government was ready to grant a 1.1 billion euro loan to develop the A350 passenger aircraft.
“As far as we are concerned all pre-conditions have been met and the funds are available,” said Peter Hintze, parliamentary state secretary at the ministry of economics, in a statement implying that the conditions were in line with WTO rules.
Airbus, a division of the European Aeronautic Defence and Space Company (EADS), intends to launch the A350 as a rival to Boeing’s new 787 Dreamliner.
The 12 billion euro program is supported by four partner nations: Britain, France, Germany and Spain.
France has announced support of 1.4 billion euros and Britain is contributing 400 million euros.
The Spanish government remains in discussions with Airbus over its funding offer but reports say it could be around 300 million euros.
The WTO treats disputes at the government level, and the Boeing-Airbus case pits the US against the 27-nation EU.
“As US officials have repeatedly made clear, there’s a place for negotiations, but not on programs and actions declared inconsistent with WTO obligations,” Austell said.
“Illegal European subsidies have done great harm to the US aerospace industry. It’s time to level the playing field and let companies compete on product, price, innovation, and customer support without market-distorting government subsidies,” he said.
The US filed the WTO complaint in October 2004, alleging that an accord that allowed the EU to provide up to a third of development costs of new airliners was no longer valid since Airbus was now a major industry player and not the fledgling firm when the deal was struck.
The EU has also filed a complaint against the US on multibillion-dollar state aid to Boeing. A first interim ruling in that case is due to be delivered in June, the WTO said.
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