U.S. Urges EU Not To Reimpose
Duties After WTO Tax Break Ruling

Sanctions threat said to jeopardize "har
monious" trans-Atlantic relations

Unfair European Union Subsidies Ending will make
Harmonize the Global Market

Washington --The Bush administration has criticized European Union (EU) intent to reimpose trade sanctions after the World Trade Organization (WTO) ruled as inadequate a U.S. law repealing illegal export tax breaks.

According to Washington, Staff Writer;Bruce Odessey, in its ruling issued February 13, the WTO Appellate Body said the 2004 law passed by the U.S. Congress repealing the tax breaks improperly continues them for two years, through 2006.

Also improper, it said, is a "grandfather clause" continuing some tax breaks beyond 2006 that were included in business contracts signed before late 2003.

At issue were the Foreign Sales Corporation (FSC) and the successor Extraterritorial Income Act (ETI), which allowed certain U.S. exporters to exclude some of their trade-related profits from taxation. WTO had ruled against each program as violating a WTO agreement that prohibits certain government subsidies.

In March 2004, the EU began imposing retaliatory duties -- a percentage (rising each month) of the $4 billion annual level authorized by the WTO -- on certain U.S. imports. In January 2005, the EU suspended the retaliatory duties pending its challenge of the U.S. repeal.

After the final Appellate Body ruling, the EU quickly threatened to reimpose sanctions within 90 days unless the United States complied fully. Neena Moorjani, Office of the U.S. Trade Representative press secretary, urged the EU to refrain.

"Congress has repealed the FSC and the ETI, and prolonging this dispute will not serve to foster harmonious transatlantic relations," Moorjani said in a February 13 written statement. "This is especially true given the fact that the general transition provision expires at the end of this year, and any benefits from the grandfather provisions will be extremely small."

Some of the grandfathered U.S. tax breaks go to Boeing Company, rival of EU-subsidized Airbus. Unable so far to reach a negotiated resolution on the larger issue of aircraft subsidies, each side has filed WTO complaints against the other, creating possibly the most complex set of WTO dispute-resolution cases ever.

Moorjani said that by reimposing sanctions the European Commission (EC) would "reinforce the perception that the EC is primarily acting in response to the U.S. filing of a WTO complaint against Airbus subsidies." (A.1)

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).

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.

In October 6, 2005, The United States has been clear in its message: Launch aid for the A350 or any other Airbus aircraft is completely unacceptable. "The commitment of launch aid by any of the EU Member States is yet another step in the wrong direction. We want to negotiate an end to aircraft subsidies, but the commitment of aid makes that even harder to do.

"It’s clear that the EU countries are unwilling to stop subsidizing Airbus. Therefore, we will continue to push ahead with our WTO case.

"We take no comfort from any offer to postpone the actual payment of the launch aid these countries have already promised to provide. The announcement of their commitment to back the A350 will affect Airbus’s financing costs regardless of when they formally write the check." (A.3)

Over its 35-year history, Airbus has benefited from massive amounts of EU Member State and EU subsidies that have enabled the company to create a full product line of aircraft and gain more than a 50 percent share of large civil aircraft ("LCA") sales. Every major Airbus aircraft.

The EU provided further loans and infrastructure that pushed the total amount of A380 subsidies to approximately $6.5 billion. Airbus is on the verge of launching another new aircraft, the A350, and it has requested $1.7 billion in risk-free launch aid for that aircraft as well, even though it has stated publicly that it could “easily” finance the project itself. Of course, even if it could easily finance the project, a risk-free advance of $1.7 billion provides a very significant competitive advantage over Boeing, its U.S. competitor, which has to bear the risk of launching new models without the support of the U.S. Treasury. Efforts to Negotiate a New Bilateral Agreement. (A2)

YET, EU still wants take over American's military, Heaven's......NO COMMENT...There is no doubt about that "Boeing is The most Advanced in aerial-refueling technology, integrated systems, and aircraft manufacturing and modification, and it is more than 75 years of experience". As what people say "the experience count and The Boeing Company continues to applying the latest high-tech for the KC-767 Tanker and it is the best solution".

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)

The Boeing Company 787 Dreamliner selected Goodrich supplier, Boeing Wichita will supply the metallic struts that hold the engines on the wings. • Goodrich's Aerostructures unit, headquartered in Chula Vista, Calif., will design and build the 787's composite nacelles, the outer covering of the engines. Goodrich estimated the value of its part of the contract as $4 billion, over somewhere between 10 and 20 years. (A5)

Also Goodrich starts work on Boeing-parts plant. The company broke ground Tuesday on a 140,000-square-foot building that will be used for assembly of engine parts for the new Boeing 787 Dreamliner. Goodrich Aerostructures Integration Services will be at 2615 94th St. S.W., adjacent to the company's landing-gear facility, on property leased from the Snohomish County Airport. Goodrich will own the building. (A6)

Boeing has selected two engine types, the General Eletric 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.