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EU contests US$205b claim over Airbus support

GENEVA - A senior European Union official dismissed on Tuesday new US claims that European aircraft maker Airbus had reaped benefits of 205 billion dollars (148 billion euros) thanks to subsidies.

In the latest episode of the World Trade Organisation battle between the United States and the EU over contested subsidies for their aviation giants, Boeing and Airbus, the US more than doubled its estimate of the impact of state financing on Airbus, according to the EU.

The figure was put forward in a confidential US submission to the WTO panel dealing with the disputed European support for the Airbus, according to the EU official, who requested anonymity.

“This is rather absurd. They’ve done that in a totally ridiculous, overblown way,” the official said.

The panel is due hold its last hearing with the legal teams behind closed doors on Wednesday and Thursday.

The EU said the figure for the benefits of “member state financing” given by the US to the panel was equal to eight times the capitalisation of Airbus’s parent company, EADS, or 12 times its net assets.

The EU alleged that if it applied the same method to calculate the impact of US federal, state and local support on Boeing, it would amount to 305 billion dollars, instead of the current claimed value of 23 billion dollars.

In March, the United States had argued that Britain, France, Germany and Spain had provided 15 billion dollars to Airbus to launch new products, producing a “resulting benefit” of “well over 100 billion dollars.”

The EU and US have been locked in legal battles in the WTO over allegations of illicit subsidies to their respective aircraft giants since October 2004, after a gentleman’s agreement on the issue broke down.

Rulings by the WTO panels dealing with the two disputes are not expected before December for Airbus, and June 2008 for Boeing.