March 23, 2010

Final WTO Ruling Confirms Illegal Airbus Subsidies Harmed United States

WASHINGTON, D.C. – A final ruling of the World Trade Organization (WTO) panel has confirmed that the European governmental partners of EADS/Airbus provided illegal “launch aid” for all of its large commercial aircraft, which allowed Airbus to substantially increase its market share and materially harm its U.S. competitor, U.S. Rep. Norm Dicks learned Tuesday.

The panel found that EADS used “unsecured loans, success-dependent and back-loaded repayment arrangements as well as below-market interest rates” to assist in the launch of its entire fleet of large airliners and boost its market position. In addition, the launch aid for its biggest jet, the A-380, represented a “prohibited subsidy” requiring prompt remedy, Rep. Dicks has learned.

Rep. Dicks, chairman of the House Defense Appropriations Subcommittee, said the final WTO ruling confirms the judgment contained in an interim report issued in Sept. 2009 relating to illegal subsidies.  “This independent panel has concluded that Airbus could not have achieved the growth of market share – harming U.S. workers – without its pattern of illegal assistance,” Rep. Dicks said.

“These subsidies resulted in the loss of hundreds of billions of dollars and tens of thousands of aerospace jobs in the United States and today’s ruling should help restore a level global marketplace for airliners.  What it means is that EADS must immediately curtail these subsidies going forward, and in fairness it should be required to repay the illegal assistance – documented for each aircraft by the WTO panel – that allowed it to unfairly increase its market share by 20 percent,” Rep. Dicks said.

“The ruling validates the U.S. government’s longstanding contention that the E.U. governments were utilizing this improper launch aid to steal American jobs, and it provides compelling evidence that we should use to demand that EADS begin playing by the rules,” he added. 

In addition, the congressman said “our government must consider these findings very seriously and demand tangible remedies especially in light of the European firm’s interest in increasing U.S. business and competing for Defense Department contracts.”

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