WTO to issue landmark aircraft industry ruling

Last Updated: Friday, September 4, 2009 - 11:35

Geneva: World Trade Organisation judges will rule on Friday for the first time on whether the European Union handed out illegal subsidies to Airbus in a verdict that could affect planemakers worldwide.

The three-member WTO panel is widely expected to agree with complainant Washington that the billions of euros in "launch aid" Airbus received to build the A380 and other top-selling planes was anti-competitive and violated trade laws.

Their findings, to be distributed to US and European diplomats at about 1400 GMT, will set the markers for acceptable government funding in civil aviation and also colour trans-Atlantic relations at a sensitive time for the global economy and multilateral trade talks.

It also stands to impact Airbus` strategy as it develops its next airliner, the wide-body A350 due in the next decade.

"This will likely be a fairly significant document," said Brendan McGivern, a partner with the law firm White and Case in Geneva, which has not been involved in either the Airbus case or a counter-suit by Brussels against US rival Boeing whose findings are due out in six months.

Trade lawyers expect Washington to lose that parallel case. That would leave both sides bruised as a result of the biggest and most commercially significant arbitration in WTO history.

The extent to which Airbus or Boeing come out cleaner than the other in the twin preliminary rulings will affect the dynamics of negotiations to settle their differences privately, which both sides have said they eventually want.

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First Published: Friday, September 4, 2009 - 11:35

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