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Boeing May File WTO Suit Against Airbus
Question:
Sep 25, 2001 (Defense Daily/PBI Media via COMTEX) — Boeing [BA] in October plans to hold a key internal meeting involving top executives across its headquarters and business units to assess the future of the commercial aviation industry and decide whether to request the United States file a World Trade Organization (WTO) suit against European jet-maker Airbus over industrial subsidies, according to a top executive. U.S. officials have never filed a suit against Airbus because senior Boeing executives have consistently balked at the last minute under pressure from European air carriers that have asked the American giant to reconsider launching a potentially messy trade dispute. Boeing also has faced pressure from major suppliers that also supply Airbus, arguing that they could lose valuable contracts in the ensuing spat. A key factor is that Boeing sees as an opportunity to lodge a trade complaint as Airbus accepts $4 billion in loans below market rates from France, Germany, Britain and Spain to develop the A380 super jumbo jet under a $12 billion program. The project has been a top priority for European governments as a symbol of European aerospace supremacy and to end the three-decade reign of Boeing’s 747 as the world’s premiere, and most profitable, commercial jet. Should the European project prove a failure, Airbus is not required to repay the loans secured from national governments. Airbus executives for their part maintain that they do not enjoy illegal subsidies, but governmental aid outlined in a 1992 agreement between the United States and the European Union. European executives added that government’s must be allowed to invest in their aerospace capability to offset what Europe contends is a major U.S. subsidy that Boeing enjoys–a steady diet of defense contracts. Boeing rejects the assertion, adding that the stakeholders in Airbus- -EADS and BAE–together earn more from defense than it does.
Response:
LOL.. Since the US is bailing out US Airlines, which ultimately helps Boeing, I don’t see WTO taking this seriously. – Hide quoted text — Show quoted text – > Sep 25, 2001 (Defense Daily/PBI Media via COMTEX) — Boeing [BA] in > October plans to hold a key internal meeting involving top executives > across its headquarters and business units to assess the future of the > commercial aviation industry and decide whether to request the United > States file a World Trade Organization (WTO) suit against European > jet-maker Airbus over industrial subsidies, according to a top > executive.
Response:
> LOL.. Since the US is bailing out US Airlines, which ultimately helps > Boeing, > I don’t see WTO taking this seriously.
Well, if US, HP and NW don’t go bust, there won;t be many cancelled Airbus orders, not to mention many nearnew Airbuses coming ontot he market
Response:
> LOL.. Since the US is bailing out US Airlines, which ultimately helps > Boeing, > I don’t see WTO taking this seriously.
Oh, you might be surprised. The more you play out this game, the more ammunition both sides get. This is a big money game Boeing wants to play. Folks will take it VERY seriously. – Hide quoted text — Show quoted text -> Sep 25, 2001 (Defense Daily/PBI Media via COMTEX) — Boeing [BA] in > October plans to hold a key internal meeting involving top executives > across its headquarters and business units to assess the future of the > commercial aviation industry and decide whether to request the United > States file a World Trade Organization (WTO) suit against European > jet-maker Airbus over industrial subsidies, according to a top > executive.
Response:
> > LOL.. Since the US is bailing out US Airlines, which ultimately helps > Boeing, > I don’t see WTO taking this seriously. > Well, there’s a difference between a government bailing out airlines > that are losing money directly because that govt. ordered them to stop > flying, and governments subsidizing a profitible airplane company even > in flush times!!
The quandry about this issue is tht subsidy actions have always been against goods – i.e. aircraft, bananas, beef, etc. This is principally about a service. The WTO has not really defined really clear standards about subsidization of services. In any event, you’re going to have to find a carrier that’s willing to file a complaint – and I don’t know who would attempt it. Rich
Response:
> The quandry about this issue is tht subsidy actions have always been > against goods – i.e. aircraft, bananas, beef, etc. This is principally > about a service. The WTO has not really defined really clear standards > about subsidization of services.
Take a look at GATS and many of the proceedings concerning subsidization of telecom services. miguel — Hit The Road! Photos and tales from around the world: http://travel.u.nu