Airbus seeks to end World Trade Organisation dispute

Airbus has agreed with the governments of France and Spain to make amendments to A350 repayable launch investment contracts.

After 16 years of litigation at the World Trade Organisation, the manufacturer said it hopes this would be the final step to stop the long-standing dispute and removes any justification for United States tariffs.

The tariffs imposed by the United States Trade Representative are currently harming all targeted industry sectors, including US airlines, Airbus said, and are adding to a very difficult environment as a consequence of the Covid-19 crisis.

As a result, Airbus has decided to make a final step to remove the last contentious point and amend the French and Spanish contracts to what the WTO considers the appropriate interest rate and risk assessment benchmarks.

The WTO has already ruled that RLI is a valid instrument for governments to partner with industry by sharing investment risks.

With this final move, Airbus considers itself in complete compliance with all WTO rulings.

“We have fully complied with all the WTO requirements.

“These additional amendments to the A350 RLIs demonstrate that Airbus has left no stone unturned to find a way towards a solution,” said Airbus chief executive, Guillaume Faury.

“This is a clear signal of support to those who are suffering from the severe impact of the tariffs imposed by the USTR, especially at a time when industries are hard hit by the consequences of the Covid-19 crisis.”

The government loans are among European measures the World Trade Organisation previously deemed illegal subsidies as part of a pair of cases also targeting United States support for Boeing.

The failure of the European Union to completely withdraw the subsidies led to approval by the WTO for United States sanctions starting from late last year on up to US$7.5 billion of European goods ranging from wine to whisky.

Trade groups are bracing for an escalation of the row in the autumn when the EU is expected to win WTO approval to hit back with its own tariffs on US goods in retaliation for subsidies for Boeing, which the Geneva trade body also found illegal.

In a record dispute dating back to 2004, the WTO has ruled the EU and United States awarded subsidies to their respective plane makers.

For the last eight years, the argument has mainly been about whether each side has obeyed those rulings.

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