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May 23, 2018

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Airbus says complying with WTO subsidies ruling

AIRBUS said yesterday it had taken steps to comply with a World Trade Organization ruling on subsidies for its A350 and A380 jets, which has seen the United States and Europe trade legal blows on behalf of Boeing and Airbus.

The move comes days after the US won a partial victory against European Union support for Airbus at the WTO, clearing the way for possible US sanctions in a 14-year-old dispute over claims of illegal handouts for planemakers.

The EU says it expects to strike a similar legal blow later this year in a parallel WTO case about US support for Boeing, raising the prospect of a tit-for-tat sanctions battle.

Airbus confirms amendments to comply with WTO over subsidies

The row threatens to exacerbate transatlantic tensions over US aluminum and steel tariffs, and the impact on European firms from the US decision to exit an Iran nuclear pact. But both sides agree any sanctions would not happen before 2019.

In a rare public face-off between key strategists behind the long-running dispute, Boeing’s chief external lawyer in the case told BBC radio the US would be free to target any European products, not just aerospace.

“The WTO will decide what the proper number is and ... give the US that authority,” Robert Novick, co-managing partner at US law firm WilmerHale, told the BBC Today program.

“In parallel, the US will develop a list of products on which it might consider imposing counter-measures,” he added.

Airbus’s chief in-house lawyer in the case said he expected a “devastating” ruling on US support for Boeing’s 777 and 787 jets when the WTO issues its final report on those this year.

The dispute, with 5,000 pages of findings and tens of millions of dollars in legal fees, stems from claims that the world’s two largest planemakers benefited from illegal aid in the form of subsidized government loans to Airbus and research grants or tax breaks to Boeing.

Airbus did not say how it would comply with the WTO ruling but a European Commission document said it would repay an A350 loan to the UK government this year and reduce the drawdown of other loans.


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