Airbus moves to comply with WTO ruling on aircraft subsidies

Reuters  |  PARIS 

By Tim Hepher

The move comes after the won the right to seek sanctions against goods following a partial victory in its 14-year legal battle against support for at the WTO.

The EU says it expects to strike a similar legal blow in a parallel case on U.S. support for later this year.

"Airbus and the European member states France, Germany, and the UK have agreed on some amendments to and A350XWB Reimbursable Launch Investment (RLI) loans," Airbus said in a statement.

"The terms of these amendments - like the terms of the original RLI contracts themselves - remain confidential but they are aligned with current market conditions," it added.

Airbus shares slipped 0.4 percent, slightly underperforming the broader market.

The subsidies row coincides with transatlantic tensions over U.S. aluminium and steel tariffs, and the impact on European firms from Washington's decision to exit an nuclear pact.

It is also part of a two-way battle between the EU and the over aircraft subsidies that could spark tit-for-tat reprisals between the two trade superpowers.

In a rare public face-off between senior strategists in the dispute, Boeing's in the case told the that the United States would be free to target any European products, not just

"The WTO will decide what the proper number is and ... give the U.S. that authority," Robert Novick, firm WilmerHale, told the Today programme.

"In parallel, the U.S. will develop a list of products on which it might consider imposing counter-measures," he added.

The transatlantic dispute stems from mutual claims that the world's two largest planemakers benefited from illegal aid in the form of subsidised government loans to Airbus and research grants or tax breaks to

Underscoring the cost and complexity of the case, the two sides have been arguing since 2011 about whether they complied with earlier rulings.

Airbus did not say how it would comply with the final ruling on European aid but a document said it would repay an loan to the this year and reduce the drawdown of other loans. https://bit.ly/2GDHWVK

It also said the bankruptcy of Russian carrier Transaero, resulting in fewer deliveries, had helped it to comply, while other aid had been blunted by the passage of time - an argument that has previously been rejected by

Karl Hennessee, at Airbus, told Today that Airbus wanted a peace settlement similar to one between and that set the tone for global aircraft export financing.

Nevertheless, Boeing has appeared to rebuff the offer.

"The most important message that and Airbus can send to the rest of the world about the rules of trade in civil aircraft is to comply with this decision," Novick told the BBC.

(Reporting by Tim Hepher; Editing by and Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 22 2018. 16:50 IST