Texas Insider Report: Washington D.C. United States Trade Representative Ron Kirk today confirmed that a World Trade Organization (WTO) dispute settlement panel ruled decades of subsidies to Airbus provided by the European Union (EU) and certain member states are inconsistent with WTO rules.
Specifically the WTO Panel found that every instance of launch aid provided by certain EU nations for new Airbus aircraft over the last 40 years as well as other subsidies the United States had challenged caused adverse effects to the interests of the United States and therefore are WTO-inconsistent subsidies.
The Panel also concluded that certain launch aid provided for the A380 superjumbo jet was a prohibited export subsidy under WTO rules.
This important victory will benefit American aerospace workers who have had to endure watching Airbus receive these massive subsidies for more than 40 years. These subsidies have greatly harmed the United States including causing Boeing to lose sales and market share. 
Todays ruling helps level the competitive playing field with Airbus" said Ambassador Kirk.
In reaching these findings the Panel concluded that European government launch aid had been used to support the creation of every model of large civil aircraft produced by Airbus.
The Panels findings also confirmed that launch aid and the other challenged subsidies to Airbus have significantly distorted the global market for large civil aircraft and that those subsidies have directly resulted in Boeing losing sales and market share.
What emerges clear as day from this panel report is that Europe has never been able to provide launch aid in a manner that is consistent with its WTO obligations" said Office of the United States Trade Representative General Counsel Tim Reif.
This panel report should therefore be a strong signal to the European Union and the member states to refrain from future launch aid disbursements" Reif said.
BACKGROUND
The United States initiated this WTO dispute in October 2004 to end decades of launch aid and other subsidies provided to Airbus. A panel was established to examine the matter in May 2005.
Both sides have an opportunity to appeal the decision to the WTO Appellate Body within 60 days. If the Panel report is adopted or if it is affirmed on appeal the WTO will recommend that the member states withdraw the prohibited subsidies within 90 days in line with the deadline specified by the Panel in its report.
With respect to the other subsidies the WTO will recommend that the EU and the member states that back 
Airbus take appropriate steps to remove the adverse effects or withdraw the subsidies.
WTO rules contemplate such action being taken within six months.
In either case should the European Union and the relevant member states fail to comply with these recommendations by the deadline the United States would be able to seek the right to impose countermeasures.
If the EU and the member states assert compliance but the United States disagrees the United States could seek to have any disagreement referred back to the Panel.
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE EXECUTIVE OFFICE OF THE PRESIDENT WASHINGTON D.C.
FIGHTING UNFAIR TRADE PRACTICES WINNING AT THE WTO: KEY FINDINGS AGAINST EUROPEAN SUBSIDIES TO AIRBUS
In findings announced on June 30 2010 a dispute settlement panel at the World Trade Organization ruled in favor of the United States on a case claiming that launch aid and other subsidies provided by European countries to the Airbus aircraft company over the last four decades caused adverse effects to the interests of U.S. businesses and workers. Here are key findings of the WTO panel: Launch Aid The WTO panel found that European governments have provided Airbus more than 15 billion euros (face value) in launch aid subsidizing every model of aircraft ever produced by Airbus in the last 40 years. This preferential form of financing permitted Airbus to introduce new models by offsetting the enormous costs and extremely high risks that characterize the development of large civil aircraft. Launch aid provided by Germany Spain and the UK for the Airbus A380 was prohibited per se under WTO rules because it was conditioned on the export of aircraft. Infrastructure-Related Subsidies The WTO panel found that France Germany and Spain provided more than one billion euros in infrastructure and infrastructure-related grants between 1989 and 2001 including the creation of land in Hamburg to allow Airbus to expand production facilities extending an airport runway in Bremen to allow Airbus to transport wings to other facilities for aircraft assembly and transforming agricultural land in Toulouse into industrial facilities for the assembly of the A380. Share Transfers and Equity Infusions The WTO panel found that France and Germany provided billions of dollars of share transfers and equity infusions to Airbus between 1987 and 1998. Research & Development Funding The WTO panel found that the EU France Germany Spain and the UK provided over one billion euros in funding between 1986 and 2005for research and development directed specifically to the development of Airbus aircraft. Adverse Effects for the U.S. Aircraft Industry The Panel found that the above subsidies caused adverse effects to the interests of the United States in the form of lost sales involving purchases of Airbus aircraft
by easyJet Air Berlin Czech Airlines Air Asia Iberia South African Airways Thai Airways International Singapore Airlines Emirates Airlines and Qantas and lost market share with Airbus gaining market share in the EU and many third country markets at the expense of Boeing.
