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Unfair EU Subsidies

U.S. Asks WTO to
Eye New Airbus Subsidies

Unfair European Union Subsidies Ending will make
Harmonize the Global Market

GENEVA -- The United States asked the World Trade Organization to determine whether new European Union subsidies to Airbus violate international trade rules, widening the issues being examined in the long-running dispute over government assistance to the European plane manufacturer and its U.S.-based rival Boeing.

A new 5.2 million pound ($9.2 million) grant by the Welsh Assembly to help train new workers for the Airbus A350 is effectively a new subsidy to the plane maker and supplements launch aid subsidies already announced by European Union member states, U.S. Trade Representative Rob Portman said.

"Unfortunately, the EU member states have continued to grant new subsidies to Airbus, even as our WTO case proceeds. By taking this step, we are ensuring that the new subsidies will be included in our case," Portman said in a statement.

The EU also asked the WTO to set up a panel to rule on similar claims on what Brussels says are government subsidies to Boeing Co. The United States blocked the establishment of that panel on Thursday, but if Brussels makes a second request, Washington cannot block it a second time.

"The panel request will clarify the wide range of U.S. government support for Boeing that will be subject to the panel hearing," said Peter Power, spokesman for EU trade chief Peter Mandelson. "The U.S. refused to cooperate fully with legitimate requests for documents and answers to written questions on elements of the U.S. subsidy regime for Boeing."

The United States filed a WTO complaint against Airbus aid in 2004, and Brussels retaliated with a countersuit targeting subsidies to Chicago-based Boeing.

Washington had also warned that a decision to grant aid for the planned A350 jet a fuel-efficient aircraft aimed at trans-Atlantic flights, designed to rival Boeing's 787 would make it harder to negotiate an end to the dispute. The A350 is set to enter service in 2010, two years after the Boeing plane.

"We still believe that a negotiated solution is possible," Portman said. "But one way or another, the subsidies need to end."

The world recognized that EU subsidies in question include those relating to the entire family of Airbus products (A300 through the A380) A300/A310: $3.83 billion, A320: $2.03 billion, A330/A340:$4.77 billion,A330-200:$58 million, A340-500 / A340-600:$627 million, A380: $3.73 billion.(3)

In addition, US Marshall Plan Funds to EU Subsidize on A350. (1.1) (2)

After Airbus Industry was formed in 1970, Boeing's market share (70% in the early 1970s) began to decline. In the mid-1970s, Boeing launched long-range planes (the 757 and the 767). (15).

Airbus recorded a net figure of 1,055 orders in 2005, beating Boeing's net order total of 1,002 by 53 aircraft. In gross terms, Boeing is also behind Airbus, with 1,029 against 1,111 aircraft. Airbus Total Deliveries 378, Gross Orders 1,111, Backlog 2,177. (8)

Sept. 22 (Bloomberg) -- Airbus SAS, the world's largest commercial planemaker, said European governments have promised almost 1.5 billion euros ($1.8 billion) in loans to help develop a fuel-efficient jetliner to compete with Boeing Co.'s new 787 model.

Airbus Chief Executive Officer Gustav Humbert said he has aid commitments from the governments of France, Germany, Spain and the U.K. for the new A350. Humbert said Airbus could build the plane without the loans, yet wanted the money because Chicago-based Boeing is getting government aid for the 787.

``We need the money to have an equal playing field,'' said Humbert, 55, in an interview at Airbus's Toulouse, France, headquarters. ``As long as the 787 is supported,'' Airbus should take advantage of government loans permitted under a 1992 agreement between the U.S. and the European Union, he said.(17)

Dominating EURO and freezing the world market was not any secret. It was obvious statistics and media's shouting. Yet, EU complains the $3 billion package of tax breaks Washington State offered Boeing to persuade it to build its new 787 jetliner in the Seattle area. (3)

In 2003, the state approved a $3.2 billion package of tax breaks and other incentives to help persuade Boeing to build its 787 Dreamliner in Everett. Boeing was considering an assembly site in the South. In approving the incentive package, state lawmakers hoped key Boeing suppliers would follow the 787 to Everett.(8)

The world is watching and WTO is still in process to ending unfair subsidies, yet EU continues to adding more unfair EU subsidies. This has to STOP. THE GLOBAL MARKETING IS NOT GOING TO BE BALANCED AND DOMINATED BY EU. That means the flow has to stop in EUROPE. It will create so many problems around the world, if unfair EU subsidies continues.(9)

787 Dreamliner is the most advanced Global Team for the suppliers and partners around the world. France Dassault Company is one of the suppliers Systèmes Update to Digital Tools for 787 Global Team: Product Lifecycle Management (PLM) software suite by Dassault Systèmes as members of the global 787 team. (11)

Boeing has selected two engine types, the General Electric GENX and British Company, Rolls-Royce Trent 1000, for Boeing 787 Dreamliner, an airplane that will provide the world's airlines with exceptional efficiency and environmental performance. The General Electric and Rolls-Royce engines will enable the 787 to fly higher, faster, farther, cleaner, quieter and more efficiently than comparable airplanes," (12)

The 787 is super-efficient airplanes, More Frequency Choices, More Non-Stop, Point-to-Point Flights, Super Fuel Efficient, and A Great Cargo Space, and The Best Environmental Leadership that will provide passengers with a better flying experience, including an improved cabin environment with more room and more conveniences. The next major milestone for the 787 will be in 2007 when the first 787 enters production. Flight test will occur the same year, with certification, delivery and entry into service in 2008.

Yet, Airbus continues to proceed illegal EU subsidies for A310 to A380.
In addition, many travelers and people are concern about the environmental issue and the noise will create due to A380 is too big. Those issue can be unknown problem around the world. People are already starting to concern about those issues:Increase taxAirfied, terminal, and miscellaneous/Costs to operator. Brisbane airport Corporation General Manager even admit that Re-configure airport to accommodate A380 eg is an expensive option and the recovery of costs will be difficult. (13)

According to World News, triumet.net: May 18, 2005 when Airbus officials announced that they were applying for $1.7 billion in government support for their new plane, the A350, the U.S. said enough is enough: It announced that it was filing a lawsuit. And on May 31, the World Trade Organization began the largest litigation effort in its history. There are so many other reports showing that the Airbus Illegal export subsidies. (Search)

The United States offered up to $20 billion for relief, but only if the European nations could get together and draw up a rational plan on how they would use the aid. The Marshall Plan, it should be noted, benefited the American economy as well. The money would be used to buy goods from the United States, and they had to be shipped across the Atlantic on American merchant vessels. But it worked. By 1953 the United States had pumped in $13 billion, and Europe was standing on its feet again. Moreover, the Plan included West Germany, which was thus reintegrated into the European community. (The aid was all economic; it did not include military aid until after the Korean War.) (7)

Despite the years of scandal and battles over subsidies, new subsidy improprieties come up every year. The plans to support the a350 are especially suspect: “A midnight amendment to Germany’s 2005 budget showed Germany plans to help the a350 with $890 million in government funds that originated as part of the US Marshall Plan” (Chicago Tribune, May 20). The Marshall Plan was created to rebuild Germany after World War ii; it’s unlikely the drafters of the plan intended to rebuild Germany at an altitude of several thousand feet. (1) (2)

The 1992 agreement was negotiated, Airbus accounted for only about 30 percent of the global market. It now represents more than 50 percent of this market. Clearly, the 1992 agreement has outlived its usefulness.

Boeing has already lost its dominance in the industry—one critical to the US both economically and militarily. Now the WTO is positioned to deal a major blow to Boeing by the end of the year. But all of this is just a shadow of a much larger battle developing between the EU and the US (3)