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Boeing-Airbus trade row heats up as US says it has halted subsidies

written by australianaviation.com.au | September 25, 2012

The US says it has halted illegal subsidies to Boeing.

The United States says it has complied with a World Trade Organization ruling on illegal subsidies to Boeing, but the European Union says it will study the measures to ensure full compliance.

The development is the latest in a bitter trade dispute between the US and EU over subsidies to Boeing and Airbus, with both sides accusing the other of misconduct.

The US has asked the WTO to approve retaliatory sanctions of as much as $10 billion over claims that the EU has failed to comply with an earlier order to halt illegal subsidies to Airbus. The EU says it has complied with the ruling.

The WTO ruled in March that Boeing had received at least $2.6 billion in illegal government subsidies in the form of US research and defence contracts.

In a statement released yesterday, Boeing said it supports US government actions to “address the relatively small amounts of subsidy that the World Trade Organization identified as inconsistent with its rules.”

But Boeing also launch another broadside against rival Airbus, saying the EU had continued to provide billion in launch aid for the A350 and was “propping up” the A380.

“The illegal subsidies to Airbus, most importantly the pernicious, market distorting practice of launch aid, must stop,” Boeing said. “The US government remains committed to ending these subsidies, and Boeing fully supports the actions the US government has taken to ending them.”

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The intensifying row comes amid US concerns over a proposed mega-merger between Airbus parent EADS and BAE Systems, a major US defence supplier.

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