US appeals own win in World Trade Organization over EU aid for Airbus

US appeals own win in WTO spat over EU Airbus aid

GENEVA — The U.S. appealed on Thursday its own victory in a landmark trade ruling against European subsidies for planemaker Airbus, asking the World Trade Organization to toughen its condemnation of the EU’s financial meddling in a market worth more than $3 trillion over the next two decades.

Details of the appeal weren’t immediately made public. But U.S. trade spokeswoman Nefeterius McPherson confirmed that Washington had joined Brussels in challenging findings from June’s 1,061-page verdict, which found that Airbus gained an unfair advantage over U.S. competitor Boeing Co. through billions worth of low-interest loans, infrastructure provisions, and research and development grants.

The EU blocked adoption of the decision with its appeal last month, putting off any talk of the 27-nation bloc speedily complying with WTO rules on loans and other payments to the France-based planemaker.

The WTO’s appellate body may not deliver its decision until 2012, giving European governments plenty of time to first see the results of their complaint that Boeing receives billions in backdoor subsidies through NASA and U.S. Defense Department contracts. A confidential, preliminary decision is expected in September.

The six-year-old dispute is moving with record slowness, and the complicated tit-for-tat game of legal maneuvering is delaying resolution of a trans-Atlantic fight that has simmered for decades as Airbus climbed above Boeing to world No. 1 plane manufacturer.

Airbus used billions of euros in low-interest government loans — commonly called “launch aid”— to develop the A380 superjumbo and other planes. Boeing wants its rival to give the money back until repayments reach what they might have been if the lending took place at market rates.

Airbus’ immediate concerns are that it can roll out well-tried funding strategies for the development of its mid-size, long-haul A350 XWB — to compete against Boeing’s 787 — and that a conclusive judgment on illegal aid doesn’t add a political hurdle to the bid by its parent company, EADS, for a $35-billion U.S. air force contract for refueling jets.

The EU’s appeal last month canvassed nearly the entire case against government support for Airbus, even as European officials insisted that the ruling was “mixed.”

In a case that covers dozens of claims and counterclaims, Washington may be appealing the WTO’s rejection of a number of alleged instances of wrongdoing linked to older Airbus plane models. The panel also ruled against U.S. arguments that certain French payments amounted to export subsidies and that EU funding allowed Airbus to undercut Boeing prices.

The competing cases have arguably become even more important as new competitors from China and elsewhere emerge, and will likely set industry-defining guidelines for government support in the civil aviation sector.

Most trade analysts expect the dispute to eventually be solved through negotiations, even if the WTO can authorize retaliatory sanctions against countries that refuse to comply with rulings. That would still take years of litigation.