EU, US fight over plane subsidy

Geneva, March 15:

The United States and the European Union have locked horns in their World Trade Organisation (WTO) dispute over government subsidies to Boeing Co and Airbus, with Washington rejecting Brussels’ demand for more information on support programs to the US-based plane maker.

The dispute, widely expected to be the most complicated and costly in the history of WTO, has been subject to legal wrangling at every turn as both sides try to outflank one another. Officials said that the constant maneuvering by both governments, as well as the difficult questions raised by the row, have led to formal suspension of the WTO’s original time-table for completing initial investigations into the two companies’ subsidy programmes by late July.

The dispute centres on US objections to European government support for Airbus. The US says the subsidies have distorted market prices and allowed the France-based manufacturer of jetliners to overtake Boeing as the biggest civil aircraft seller. The EU argues that the US provides vast amounts of hidden support to Boeing through military contracts.

The EU asked WTO’s dispute settlement body to initiate a procedure enabling countries to obtain information from one another on payments made to companies. The US has so far refused to share information on 13 government subsidy programmes it says are outside the scope of the WTO’s investigation, even if Brussels claims its request should automatically activate the procedure.

“We regret that the US persists in denying access to information the EC is entitled to under WTO rules,” EU negotiator Raimund Raith said on behalf of the 25-nation bloc. “The US by continuing to block is violating its basic duty to cooperate.” The US said it was ‘surprising’ that the EU was asking for further sharing of information, citing previous reluctance from Brussels on the procedure until both sides had agreed to conditions.

Washington and Brussels ag-reed to the procedure last year, but the US said Brussels was introducing new issues not entru-sted to WTO when panels were set up in July to investigate co-mpeting claims of wrongdoing.

EU plans sanctions on US goods

GENEVA: The EU advised the WTO that it would reintroduce trade sanctions against the US in two months unless Washington complied with a WTO ruling condemning tax breaks for US companies operating overseas.

The EU said, however, that it was still offering the US ways to end the long-standing dispute without have to incur sanctions on lists of targeted products, including everything from textiles and foodstuffs to automotive parts and steel. The announcement was made 30 days after a WTO panel upheld a decision condemning the tax breaks, affirming previous judgments that the so-called Foreign Sales Corp, law breached global trade rules by giving illegal subsidies to some US businesses. — AP

S Korean request

SEOUL: South Korea is seeking consultations with Japan over a dispute about computer chip tariffs, setting in motion a possible settlement by the WTO. South Korean government sent a letter to Japan through channels in Geneva, Switzerland, where the WTO is headquartered, seeking the bilateral consultations. — AP