Negotiations between the US and Europe over Europeâ€™s subsidies to Airbus arenâ€™t going well. A telephone session late last Friday between Peter Mandelson, the EU trade commissioner, and Robert Zoellick, the American deputy secretary of state, ended abruptly, with an irate Mandelson narrowly winning the race to hang up first. Airbus has received some $15 billion in launch aid loans from the governments of Spain, France, Britain and Germany â€” risk-free loans.
Well, that argument doesnâ€™t sell anymore, since Airbus now sells more planes than Boeing does. The two sides have been trying one last time to hash out a resolution. Last week Zoellick warned, in delicate bureaucratese, that if Airbus went back to the public trough for more launch aid for the new midsize airplane to compete with Boeingâ€™s new 7E7 Dreamliner, the US would go to the WTO. Great. This case should have been taken to the WTO a long time ago.
Airbus and the EU like to counter with the red herring that Boeing also gets government help, through defence contracts, and through tax breaks from Washington State. Neither argument holds up. Airbus receives more in defence revenue than Boeing, according to American negotiators. The Washington State tax breaks would take 20 years to realise, while Airbus gets to munch on launch aid in the here and now. â€” The New York Times