SOUR GRAPES ....
US warns it could sue Europe at the WTO over Airbus plea for government help
Date 19/5/2005 Source COM Related Stories N/A
Time 18:37
WASHINGTON (AFX) - The US government Thursday warned it could yet sue Europe at the WTO after European aircraft maker Airbus Industrie appealed for British government aid to help develop its A350 long-haul plane.
The request, which also angered Airbus's US arch-rival Boeing Co, came as the US government and the European Union battle to negotiate a deal on aircraft subsidies without going through the World Trade Organisation.
The office of the US Trade Representative (USTR) warned that the British government's decision on the request for A350 launch aid would be pivotal in the dispute.
'Our position has been clear: no new subsidies,' USTR spokeswoman Neena Moorjani told AFP.
'The preferred outcome is a negotiated agreement on the elimination of subsidies,' she said.
'However, if additional subsidies are committed, we have said that we will resume litigation at the WTO, and that remains our position.'
Earlier Thursday, Airbus said it had lodged a request with the British government for an unspecified amount of reimbursable launch aid for its A350 programme.
The A350 was approved in December 2004 by Airbus shareholders European Aeronautic Defence and Space Company, which owns 80 pct of the company, and BAE Systems, which has a 20 pct stake.
The twin-engine plane is aimed at competing with Boeing's planned fuel-efficient 787 Dreamliner, which the US company hopes will help it regain the top spot in global commercial aviation.
The A350 project has become a crucial battlefield in the fierce competition between Airbus and Boeing and the wider battle being waged by the United States and the European Union over aircraft subsidies.
The United States believes financial aid given to Airbus to launch new aircraft is illegal, while the Europeans accuse the US of subsidising Boeing through military contracts.
But the EU's executive commission said that public aid to help develop the A350 was legal under WTO rules, and that it still wanted a deal with the US over state aid for aircraft makers.
'In the view of the commission, the launch investment is WTO legal, and as things currently stand, it is part of the commercial landscape for aircraft development in the EU,' spokeswoman Francoise Le Bail said in Brussels.
Le Bail warned that any US action to bring the case before the WTO would be 'counterproductive'.
'We have always said we prefer to resolve the discussion bilaterally rather than going to the WTO,' she insisted.
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