US trade officials skeptical of EU’s compliance in the Airbus case

The U.S. Trade Representative’s office on Wednesday expressed skepticism over the European Union’s assertions that they have fixed longstanding problems in the Airbus case.

The World Trade Organization (WTO) ruled last week that the EU had employed a subsidies system that hurt U.S. airplane manufacturer Boeing and it would need to change its policies to stop the harm or face tariffs on European products.

The EU said that it has made the required changes and is fully in compliance with the WTO’s dispute settlement body’s decision.

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“The European Union has taken appropriate steps to address the remaining and additional elements of the DSB’s recommendations and rulings, either through the withdrawal of subsidies or the removal of the adverse effects,” the EU wrote in a communication sent to the WTO.

But USTR questioned whether the EU could have already changed its policies in what they called “one of the most egregious examples of using government subsidies to distort markets.”

“Rather than seriously addressing U.S. concerns, the EU’s claim is simply the latest effort to flout the WTO dispute settlement process and kick this 14-year-long litigation further down the road,” a USTR spokesperson said in an email to The Hill.

“The last time the WTO ruled against the EU subsidies to Airbus, the EU responded with a long list of steps that it claimed to have taken to eliminate the problem,” they said.

“The WTO flatly rejected those assertions. Today’s statement is more of the same, and clearly does not represent a serious effort to deal with its longstanding breaches of WTO rules and the huge harm they have caused the United States.”

The WTO decision cleared the way for the United States to levy billions in tariffs on EU products over the harm done to Boeing over subsidies used by Airbus to launch its A380 and A350 jets.

“This report confirms once and for all that the EU has long ignored WTO rules, and even worse, EU aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue,” said U.S. Trade Representative Robert Lighthizer said last week. 

A WTO appellate body found that the European Union and four of its member countries — the United Kingdom, France, Germany and Spain — didn’t comply with prior rulings over subsidies, which gave Airbus an unfair advantage on the world market and hurt U.S.-based Boeing.

Retaliation reach beyond products from those four countries and would apply to any EU products the United States chooses until they are satisfied there is compliance.

The tariffs could be scheduled as early as 2019 and would likely be the largest-ever WTO authorization of retaliatory tariffs, Boeing said last week. 

The WTO report specifically says that the Airbus subsidies hurt Boeing through lost sales of large widebody jets to several major global airlines and in markets such as the European Union, Australia, China and the United Arab Emirates.