EU trade chief claims both Airbus and Boeing could lose over subsidies

Airline Industry Information, Nov 22, 2004

AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD

The new EU Trade Commissioner Peter Mandelson has claimed that both US aircraft manufacturer Boeing and its European rival Airbus could end up losing if their row over state subsidies ends up in front of the World Trade Organisation (WTO).

Boeing and Airbus have been trading tit for tat accusations over the amount of funding each receives from the US and EU respectively after failing to agree on new terms for their 12 year old state aid limit agreement. Mandelson said that like the US he would prefer to see more discussion between the two sides based on the 1992 agreement.

If the case goes to the WTO Mandelson claims it is very likely that both the EU and US offer illegal aircraft subsidies meaning that both sides would have the power to impose economic sanctions on each other. Mandelson however said that he was prepared to go all the way in the EU's support of Airbus and claims that the EU case is strong, reports Reuters.

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