EU Must Stop
Countless Unfair EU subsidies
To Harmonize
"Global Market "

Unfair European Union Subsidies Ending will make
Harmonize the Global Market

According to March, 2006 GENEVA - The dispute, widely expected to be the most complicated and costly in the history of the World Trade Organization, has been subject to legal wrangling at every turn as both sides try to outflank one another.

Officials said the constant maneuvering by both governments, as well as the difficult questions raised by the dispute, have led to the formal suspension of the WTO's original timetable for completing initial investigations into the two companies' subsidy programs by late July.

The dispute centers on U.S. objections to European government support for Airbus. The U.S. 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 United States provides vast amounts of hidden support to Boeing through military contracts.

"The United States already agreed to expand the period for information gathering by 50 percent," it told the dispute settlement body. "We have already submitted more than 40,000 pages of information, the majority of them pertaining to NASA and Defense Department programs."

It was the EU "which refused to fix obvious errors in the panel request ... even though the United States pointed out those errors well in advance," the U.S. said.

Speaking of "United States pointed out those errors well in advance," it is reminded us that Over 30 years of Unfair EU subsidies. i.e, the EXPORT SUBSIDIES, Government Support for Airbus:

Since 1967, the governments of France, Germany, Spain, and the United Kingdom have provided billions of euros in subsidies to their respective Airbus member companies to aid in the development, production and marketing of Airbus civil aircra,ft. These governments have provided more than $15 billion in launch aid to finance all or a large portion of the development costs for all Airbus aircraft models and provided other forms of support, including equity infusions, debt forgiveness, debt rollovers, and marketing assistance, including political and economic pressure on purchasing governments. The EU’s aeronautics research programs are driven significantly by a policy intended to enhance the international competitiveness of the European civil aeronautics industry. EU governments have spent hundreds of millions of euros to create infrastructure needed for Airbus programs, including 751 million euros from the City of Hamburg to create land that Airbus is using for the Airbus A380 “superjumbo” project and 182 million euros from French authorities to create the AeroConstellation site, which contains the Airbus facilities for the A380. With more than $6 billion in subsidies, the Airbus A380 is the most heavily subsidized aircraft in history.

After 30 years, the Airbus Integrated Company - successor to the original Airbus consortium and representing a partnership of the European Aeronautic, Defense, and Space Company (EADS) (80 percent equity share) and BAE Systems (20 percent equity share) - Airbus is a mature company that should face the same commercial risks as its global competitors. The longstanding European rationale for Airbus subsidies – that they are necessary to bolster an infant industry – has clearly ceased to reflect marketplace realities.

In 2004, longstanding concerns over the past subsidization of Airbus and new concerns that Airbus would seek subsidies for yet another new Airbus plane led the United States to seek the negotiation of a new agreement to end subsidies for the development and production of large civil aircraft. After discussions over the spring and summer made it clear that the EU was reluctant to pursue such a goal, the United States requested consultations at the WTO with respect to the launch aid and other forms of subsidies that EU governments have provided to Airbus. Concurrent with the U.S. consultation request, the United States also exercised its right to terminate the 1992 U.S. – EU bilateral agreement on large civil aircraft. The U.S. concerns over the subsidization of Airbus were validated when Airbus executives subsequently declared publicly that Airbus was seeking additional launch aid subsidies to support a new aircraft program known as the A350.(3)

What about the Government Support for Airbus Suppliers from Belgium, France, Spain and United Kingdom regardless United States have so many partners and suppliers in all over the states and all over the world? Well, take a look at some of those examples of EU dominating tactics which do not help for the global market balance, see the following:

Belgium: The Federal Government of Belgium, in coordination with the three regional governments, subsidizes Belgian aircraft component manufacturers that supply parts to the Airbus Integrated Company. In November 2001, the Belgian federal government reached an agreement with the three regional governments, usually responsible for R&D and investment promotion, on a 195 million euro package for aviation research and development for Airbus A380 components. Belgium claims the program was structured in accordance with the 1992 bilateral agreement, and covers non-recurrent costs. According to Belgian industry sources, about 160 million euros remains available of this amount, and the costs covered to date have netted orders worth 1.3 billion euros for the A380. The Belgian federal government says it has discontinued an earlier Belgian exchange rate subsidy program.

France: In addition to the 1.3 billion euros in reimbursable advances, spread out over several years, for development of the Airbus A380 super-jumbo aircraft, the government of France has committed to provide an additional 59 million euros in reimbursable advances to other aero- structure companies, which have concluded supplier partnership agreements with Airbus for development of the A380 airframe. France's 2005 government budget appropriates 330 million euros toward its A380 reimbursable advance program, to be disbursed to French companies Airbus, Latécoère, Socata and Aircelle. In addition to R&D, specific funds (32 million euros in 2005 and 34.5 million euros in ongoing programs) are earmarked for the development of on- board avionics and structural systems for the Airbus A380 and the Dassault Falcon F7X, a long- range business jet.

Spain: The recently completed Puerto Real factory in Spain's Andalucia region is responsible for constructing 10 percent of Airbus' new A380 aircraft. Spain's Ministry of Science and Technology currently subsidizes A380 construction through its agreement to provide 376 million euros in direct assistance through 2013. To date, the ministry has provided 92.5 million euros of that obligation. Furthermore, the regional government of Andalucia has channeled an additional 13 million euros of State General Administration regional incentive funds and 17.5 million euros of its own funds to subsidize the A380 project.

Government Support for Aircraft Engines from United Kingdom: Since 1988, the UK government has committed 949 million pounds to direct product development of Rolls-Royce civil aircraft engines. Despite Rolls-Royce’s substantial market share during this period, the UK government has been repaid only 314 million pounds. This amount would not appear to cover the cumulative interest expense on equivalent commercial debt over the period, let alone provide a return on the loan's principal.

In February 2001, the UK government announced its intention to provide up to 250 million pounds to Rolls-Royce to support development of two additional engine models for large civil aircraft, the Trent 600 and 900. The UK government characterized this engine development aid as an “investment” that would provide a “real rate of return” from future sales of the engines.

The European Commission announced its approval of a 250 million pounds "reimbursable advance" without opening a formal state investigation into whether the advance constituted an illegal (under EU law) state aid. According to a European Commission's statement, the “advance will be reimbursed by Rolls-Royce to the UK government in case of success of the program, based on a levy on engine deliveries and maintenance and support activity.” Detailed terms of the approved launch aid were not made public. To date, none of the launch aid for the Trent 600 and 900 has been repaid.

As the United States noted in last year’s NTE report, continuing UK government support of Rolls-Royce raises serious concerns about UK and EU adherence to the WTO SCM Agreement.

U.S. engine suppliers have lost sales of engines and claim that they have encountered suppressed prices in the United States and world markets.

France: The French government-owned engine manufacturer SNECMA will receive 102 million euros in support under a royalty-based system authorized by the European Commission for SNECMA’s development work on a family of large engines. (3)

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. (5)

We expected ending EU subsidied last year like what EU says "The EU remains ready to negotiate a balanced, phased agreement to reduce and eventually eliminate subsidies for large civil aircraft production." (3A) It makes sense if EU stop right now for unfair EU subsidies! (Dated May 31, 2005) (3A)(3B)

NOW, EU wants take over American's military, (see link Background) -(7D)(7E)(7F)
after more than 30 years of damage economic and hurt so long, disturted the global market and ripple action BY EU. 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 (see the link) KC-767 Tanker and it is the best solution".

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. (7) 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.(6). It is obious that The World fastest, The World Visionary Creation, Supper Efficiency, and Environmental Leadership Airplane 787 Dreamliner have the most suppliers and global partners involved which brings the historical global commercial aircraft to the world.(8)

(see this link) While The United States have been support the global humanitarian services whenever the world needs,what was EU doing behind the world?...UNFAIR EU SUBSIDIES AND FREEZE THE MARKET AND GLOBAL BALANCE WAS NOT BALANCED. THE CITIZENS, HAVE THE HEART TO FEELING AND EMOTION, BY THE CITIZENS REQUEST, finally, Many Senators (96) included U.S. Senators Patty Murray and Maria Cantwell approved on the Senate floor in April 11, 2005 on a resolution that called on European governments to reject launch aid for Airbus and supports the President's authority to take any action necessary to protect American aerospace jobs. The Senate voted on the resolution in April 11, 2005 (96 to 0)The result came out positive.(A) (7B)

.AIRBUS LAUNCH AID -- (Senate - April 11, 2005) (From Search)

Whereas European governments are apparently determined to target the United States aerospace sector and Boeing's position in the large civil aircraft market by providing Airbus with continuing support to lower its costs and reduce its risk: Now, therefore, be it Resolved by the Senate (the House of Representatives concurring), That-- .

(1) European governments should reject Airbus' pending application for launch aid for the A350 and any future applications for launch aid ;

(2) the European Union, acting for itself and on behalf of its Member States, should renew its commitment to the terms agreed to on January 11, 2005;

(3) the United States Trade Representative should request the formation of a World Trade Organization dispute resolution panel at the earliest possible opportunity if there is no immediate agreement to eliminate launch aid for the A350 and all future models and no concrete progress toward a comprehensive bilateral agreement covering all government supports in the large aircraft sector; and

(4) the President should take any additional action the President considers appropriate to protect the interests of the United States in fair competition in the large commercial aircraft market.

The Senate voted on the resolution in April 11, 2005 (96 to 0)The result came out positive. (7A)(7B).

It is everybody's hope and pray that President Geoge Bush should take any additional action the President considers appropriate to protect the interests of the United States in fair competition in the large commercial aircraft market once and for all. THE WORLD IS WATCHING AND STILL WAITING TO CHANGE AND CHANGE THE WORLD TO STOP UNFAIR EU SUBSIDIES................

References:

(1)http://seattlepi.nwsource.com/business/263001_wtosubsidies15.html

(2) http://www.phillyburbs.com/pb-dyn/news/24-03142006-626482.html

(3)http://www.ustr.gov/assets/Document_Library/Reports_Publications/2005/2005_NTE_Report/asset_upload_file446_7468.pdf?ht=

(3A)http://www.catch4all.com/positive/2005/EUsubsidies12.htm

(3B)http://www.longislandpress.com/dsdsmultimedia/3_ds_66537.php?show=search&mode=advanced

(4)http://www.ustr.gov/assets/Document_Library/Reports_Publications/2006/2006_Trade_Policy_Agenda/asset_upload_file765_9077.pdf?ht=

(5) http://www.house.gov/transportation/aviation/05-25-05/allgeier.pdf#search='Stop%20Unfair%20EU%20subsidies%20for%20Airbus'

(6) http://www.forbes.com/markets/newswire/2004/05/21/rtr1380632.html

(7) http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds316_e.htm

(7A) http://cantwell.senate.gov/news/record.cfm?id=243064&&days=2500&

(7B)The result was announced--yeas 96, nays 0

(7C)http://usinfo.state.gov/usa/infousa/facts/democrac/57.htm

(7D)Subsidies to Airbus (Background)

http://www.useu.be/Categories/AircraftSubsidies/May3005USAirbusWTO.html

(7E)Dated, Wednesday, January 26, 2005
The patriotic case for the EU constitution

http://eureferendum.blogspot.com/2005/01/patriotic-case-for-eu-constitution.html

(7F)http://www.catch4all.com/positive/2005/EUsubsidies12.htm

Reported By: Catch4all.com, Sandra Englund, March, 21, 2006