With a final World Trade Organization ruling on US accusations of unfair EU subsidies expected as early as Tuesday, Boeing criticized the German government’s move to provide €1.1 billion toward the development of the A350.
“On the eve of such an important decision, it is unfortunate and disappointing to see news reports quoting a senior German official saying that Germany is prepared to provide €1.1 billion for the development of the Airbus A350 – a move that flies in the face of both the expected WTO decision and the rules-based global trading system we’ve all endorsed,” Ted Austell, vice president of Boeing’s executive, legislative and regulatory affairs, said in a statement.
A senior German economic ministry official said Sunday that the government was ready to grant a €1.1 billion loan to develop the A350 passenger aircraft.
“As far as we are concerned all pre-conditions have been met and the funds are available,” said Peter Hintze, parliamentary state secretary at the ministry of economics, in a statement implying that the conditions were in line with WTO rules.
Airbus, a division of the European Aeronautic Defence and Space Company (EADS), intends to launch the A350 as a rival to Boeing’s new 787 Dreamliner.
The €12 billion program is supported by four partner nations: Britain, France, Germany and Spain.
France has announced support of €1.4 billion and Britain is contributing €400 million. The Spanish government remains in discussions with Airbus over its funding offer but reports say it could be around €300 million.
Boeing’s Austell also referred to reports of Airbus calling for a negotiated settlement ahead of the WTO ruling.
It is “curious, although not unexpected” to see such reports only 24 hours before the ruling, he said.
On Monday, Rainer Ohler, a spokesman for the France-based Airbus, urged the US and EU to enter negotiations to find “a system that satisfies everyone.”
The WTO treats disputes at the government level, and the Boeing-Airbus case pits the US against the 27-nation EU.
“As US officials have repeatedly made clear, there’s a place for negotiations, but not on programs and actions declared inconsistent with WTO obligations,” Austell said.
“Illegal European subsidies have done great harm to the US aerospace industry. It’s time to level the playing field and let companies compete on product, price, innovation, and customer support without market-distorting government subsidies.”
Some analysts believe a clear-cut WTO judgment was unlikely given the complexity of the case.
The US filed the WTO complaint in October 2004, alleging that an accord that allowed the EU to provide up to a third of development costs of new airliners was no longer valid since Airbus was now a major industry player and not the fledgling firm when the deal was struck.
The EU has also filed a complaint against the US on multibillion-dollar state aid to Boeing. A first interim ruling in that case is due to be delivered in June, according to the WTO.