US: Airbus, Boeing disputes should be kept separate

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The US Trade Representative expressed concern on Monday about reports of European launch aid to help Airbus produce its new A350 airliner and said it would take steps to ensure no harm was done to the US civil aircraft industry.

The trade representative's office also said in a statement that disputes involving involving Boeing and Airbus at the World Trade Organization were separate and should not be linked, despite some EU calls for them to be heard together.

The USTR said it was concerned about reports that European Union member states planned to provide launch aid to Airbus for production of the A350, a long-range, wide-body aircraft to compete with the Boeing 777 and 787 airplanes.

"This action is particularly regrettable in the light of the concerns we have raised in our WTO case against Airbus subsidies, and we will naturally take steps to help ensure that such financing does not cause further harm to the US civil aircraft industry," it said.

An initial report by the WTO in September found that European launch aid loans provided to Airbus were illegal subsidies under world trade rules, US lawmakers have said. But EU sources have said the ruling was not "black-and-white" or a clear US victory.

The initial report was not released publicly. The two sides in the case had several weeks to offer comments to the report, after which a final ruling will be issued.

The WTO is not due to issue an interim report on a similar case involving Boeing until mid-2010, but the European Union recently expressed concern about the time difference between the two cases and said the WTO should consider them together.

Airbus fears delays could hurt its chances of winning a multi-billion-dollar Pentagon contract. A European Commission spokesman last week said the commission was "naturally concerned."

"We are disappointed by recent EU statements that appear to try to link the two separate disputes between the United States and the EU regarding aircraft," the USTR's office said in a statement on Monday.

"As the EU is well aware, WTO rules explicitly provide that such disputes 'should not be linked.'"

The USTR said the two disputes were on different timelines because the European Union initially filed a dispute against Boeing in response to the Airbus case, then filed an entirely new case raising different issues several months later.

"The EU did not file that new case, for which the interim report is expected in June 2010, until almost nine months after the United States launched its case," the USTR said. "It is not the fault of the WTO that these two disputes are on two different timelines."