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Billions in fines loom for EU after Airbus took illegal subsidies
THE European Union faces a possible US$22 billion in sanctions after a World Trade Organisation ruled that the EU failed to remove subsidies to Airbus that broke trade rules.
The US had said in its long-running row with the EU that it would seek US$10 billion in sanctions if the EU didn't remedy illegal financing, which the trade body found in a 2011 ruling had cost Boeing plane sales and market share, reported Bloomberg.
The EU can appeal the latest decision. If it loses, the US could seek sanctions.
"This report is a sweeping victory for the United States and its aerospace workers," said US Trade Representative Michael Froman.
"We have long maintained that EU aircraft subsidies have cost American companies tens of billions of dollars in lost revenue, which this report clearly proves."
Airbus said an appeal by the European side would probably focus on interest-rate benchmarks for its government financing.
Airbus said the 574-page report also confirmed that Europe's chosen method of partnering with its aircraft industry is acceptable under international trade law.
"We only needed to make limited changes in European policies and practices to comply," Airbus said in an e-mailed statement.
"The only open point is final ruling on the interest rate benchmark for the government loans. We are confident that we will win that point on appeal."
The WTO panel said EU member states have failed to adequately remedy launch aid for Airbus's A380 superjumbo, infrastructure support and equity investments that the trade body determined in 2011 had unfairly benefited the planemaker.
The ruling also faulted financing not mentioned in that decision five years ago: the terms of more than $4 billion in launch aid for Airbus's new A350 wide-body jet.
The US had said in its long-running row with the EU that it would seek US$10 billion in sanctions if the EU didn't remedy illegal financing, which the trade body found in a 2011 ruling had cost Boeing plane sales and market share, reported Bloomberg.
The EU can appeal the latest decision. If it loses, the US could seek sanctions.
"This report is a sweeping victory for the United States and its aerospace workers," said US Trade Representative Michael Froman.
"We have long maintained that EU aircraft subsidies have cost American companies tens of billions of dollars in lost revenue, which this report clearly proves."
Airbus said an appeal by the European side would probably focus on interest-rate benchmarks for its government financing.
Airbus said the 574-page report also confirmed that Europe's chosen method of partnering with its aircraft industry is acceptable under international trade law.
"We only needed to make limited changes in European policies and practices to comply," Airbus said in an e-mailed statement.
"The only open point is final ruling on the interest rate benchmark for the government loans. We are confident that we will win that point on appeal."
The WTO panel said EU member states have failed to adequately remedy launch aid for Airbus's A380 superjumbo, infrastructure support and equity investments that the trade body determined in 2011 had unfairly benefited the planemaker.
The ruling also faulted financing not mentioned in that decision five years ago: the terms of more than $4 billion in launch aid for Airbus's new A350 wide-body jet.
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