The United States claims that European governments failed to end illegal subsidies for aircraft manufacturer Airbus and announce that they will be seeking sanctions on potentially billions of dollars of European goods. The earlier WTO ruling found that European governments had provided more than $18 billion in subsidized financing for Airbus. Europe could face punitive duties on billions of dollar of exports to the United States if the panel agrees the EU has not removed the subsidy programs.
The U.S. plans to take the first step at the World Trade Organization toward seeking sanctions on the European goods. The United States’ request will be formally submitted at an April 13th meeting of the WTO Dispute Settlement Body. Washington stated that it would seek $7 billion to $10 billion in sanctions. The process to impose retaliatory duties could take up to a year and the amount could be less than what is requested.
U.S. Trade Representative Ron Kirk released a statement outlining Washington’s intention to ask a WTO panel to judge whether the European Union had complied with the earlier WTO ruling against government programs for Airbus. Mr. Kirk said, “We refuse to stand by while American businesses and workers are disadvantaged. The European Union’s aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue, which has cost American workers their jobs and hurt their families and communities.”
The EU says it has already complied with the ruling. EU trade spokesman John Clancy said, “We regret that the U.S. has chosen to take this step, since the EU notified its compliance with its WTO obligations in the package of steps taken at the end of 2011, and the U.S. has yet to do the same in the Boeing case.”
The WTO has also ruled that American company Boeing received some $3 billion to $4 billion in research grants and tax breaks from the U.S. government. However, the deadline for the United States to comply with the WTO’s ruling on its subsidies for Boeing isn’t until September 23 of this year, while the EU’s deadline to remove the Airbus subsidies passed last December.