EU makes new offer to solve air row
The European Union has made a new offer to the US to cut government aid to Airbus in a bid to resolve the simmering dispute over subsidies to the European aeroplane maker and its US rival Boeing, an EU official said today.
But the reaction from Washington – that the EU was ”spinning to the press” - highlighted the complexity and sensitivity of the dispute.
EU Trade Commissioner Peter Mandelson phoned US Trade Representative Robert Portman on Friday to propose that both sides cut part of their subsidies immediately and discuss further aid cuts later, Mandelson’s spokeswoman Claude Veron-Reville said.
“We are proposing that there be an immediate cut in government support on both sides, and after that further cuts,” Veron-Reville said, adding that Mandelson expects an answer from Portman in the coming days.
The dispute centres on aid or subsidies to the world’s two biggest aircraft makers and how it distorts the world market for planes. Both sides claim they unfairly suffer commercial damage.
Veron-Reville refused to give specifics of the offer, but the move likely is meant to make progress on US demands that the EU halt government aid for new models, which Airbus does not have to repay if the planes are commercial flops.
Airbus spokesman David Velupillai refused to comment on the latest offer, saying it was a matter for Brussels and Washington to sort out.
Russ Young, a spokesman for Chicago-based Boeing, echoed that sentiment. “That’s the job of the two governments, to work out an agreement. We continue to support (the US government’s) willingness to take the necessary steps to end subsidies to Airbus, including WTO litigation if necessary.”
Portman’s spokesman Richard Mills said the US would comment only “at the appropriate time.”
Negotiations that started on January 11 have so far failed to resolve the dispute, which is likely to dominate talks at next month’s EU-US summit at the White House.
Mandelson has said differences over government aid were still sizeable, saying the US has a “very one-sided view over subsidies”.
US officials have said they would not take the case to the World Trade Organisation unless Europe launches new development subsidies for Airbus.
The EU has warned that taking legal action at the WTO risked prolonged trans-Atlantic political tensions and commercial uncertainty for both companies, and has pledged to take similar action against aid given to Boeing Co.
Despite the threat of legal action, Airbus is shortly expected to seek investment from European governments to support the launch of its new A350 model, which is projected to enter service in 2010.
