USTR Requests Comments On Two WTO Disputes Over Subsidies for Large Civil Aircraft
The Office of the U.S. Trade Representative (USTR) has issued two separate notices announcing that (1) the U.S. has requested the establishment of a World Trade Organization (WTO) dispute settlement panel (DSP) to examine certain measures of the European Communities (EC) and of Germany, France, the United Kingdom, and Spain (referred to below as the member states) affecting trade in large civil aircraft (LCA), and (2) the EC has requested the establishment of a WTO DSP to examine certain U.S. measures affecting trade in LCA.
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The USTR is requesting written comments by July 22, 2005 for both of these disputes.
U.S. Claims EC, Member States' Subsidies to LCA Industry are WTO-Inconsistent
According to the USTR, the U.S. claims that the WTO-inconsistent subsidies include the following (partial list):
the provision by the member states of financing for LCA design and development to the Airbus companies on non-commercial terms, such as financing with no interest rates, below-market interest rates, or repayment obligations tied to sales (launch aid);
the provision by the EC and the member states, through the European Investment Bank, of financing to the Airbus companies for LCA design, development, and other purposes;
the assumption and forgiveness by the EC and the member states of debt resulting from launch aid and other financing for LCA development and production;
EC Claims U.S. Subsides to LCA Industry Are WTO-Inconsistent
According to the USTR, the EC claims that WTO-inconsistent subsidies were provided to the U.S. LCA industry by (partial list):
state and local governments in the states of Washington, Kansas, and Illinois through financial incentives such as tax advantages, bond financing, lease arrangements, corporate headquarters relocation assistance, research funding, infrastructure measures, and other measures;
the National Aeronautics and Space Administration (NASA), Department of Defense (DoD), and Department of Commerce (DOC) through research and development (R&D) contracts, allowances, and other programs;
NASA and DoD through the provision of personnel and research, test, and evaluation facilities support on a non-commercial basis;
the U.S. Government through the Federal tax system, specifically through the American Jobs Creation Act of 2004, among other measures.
If DSPs Established, Reports Would Be Issued Within 6-9 Months
In its notices, the USTR states that if a DSP(s) is established, it would hold its meetings in Geneva, Switzerland and would be expected to issue a report on its findings and recommendations within six to nine months after it is established.
- comments should be submitted by July 22, 2005 to assure timely consideration
(See ITT's Online Archives or 04/13/05 news, 05041399 3, for BP summary of a USTR statement that the U.S. and EU were unable to reach an agreement to end subsidies for LCA, and the U.S. would return to WTO dispute settlement if the EU proceeded with additional subsidies for Airbus.)
| David Ross | (U.S.' request) | (202) 395-3581 |
| Willis Martyn III | (EC's request) | (202) 395-3581 |
USTR notices (FR Pub 06/20/05) available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-12024.pdf (D/N WTO/DS 316 - U.S.' request) and http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-12023.pdf (D/N WTO/DS 317 - EC's request)