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US claims victory over ‘illegal’ Airbus subsidies

The World Trade Organisation (WTO) has ruled that some of the subsidies given to Airbus, the aircraft manufacturer, by European governments, including the UK, were illegal.

In a preliminary ruling, the WTO handed a partial victory to the United States, which brought the case against the European Union.

The case, which began in 2004, is the longest-running investigation by the WTO.

The judgment, which has not yet been published, is understood to have found that loans from the UK, France, Germany and Spain, some relating to the A380 passenger jet, were an illegal subsidy.

The case did not encompass aid to the new A350 wide-bodied jet, a rival to Boeing’s Dreamliner.

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The two sides were split on the meaning of the verdict. US trade officials called the ruling “a great victory” while, in Europe, an industry observer pointed out that it was “not a black and white case”.

“It simply is not a great victory for the United States,” he said.

European sources said that the draft WTO report dismissed 70 per cent of the US claims over aircraft subsidies and cautioned that “the reverse case was coming up”.

The EU has brought its own case against the US, claiming that Pentagon defence contracts to Boeing amount to a subsidy. A ruling in that case is expected in about six months.

The two sides are then likely to pursue an out-of-court settlement of the cases.

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The EU partner nations have given Airbus repayable launch aid to help the company to compete with Boeing.

However, Airbus lost its underdog status in 2003 when it overtook the US company as the world’s largest manufacturer of commercial aircraft.

The US case against the EU said that Airbus had, since its inception, received more than $15 billion (£9 billion) in launch aid, including $3.7 billion in loans for development of the A380 superjumbo.

The WTO had been expected to side with the US in the case and Airbus partner nations rushed to agree launch aid for a new aircraft, the A350 XWB, earlier this summer.

The UK committed £340 million to the A350 last month in a deal that assigns the design and manufacture of the aircraft’s wings to the UK, which will help to secure 11,000 jobs.