Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-11-13-Speech-2-381"
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"en.20071113.35.2-381"2
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"Madam President, ladies and gentlemen, it is important to remember that you invited the Commission here today to discuss the dispute between the United States and the European Union on the support provided by the governments concerned for Airbus and Boeing.
Once the WTO has come to a decision, probably in 2008, it is very likely that this will not be the end of the matter. Both parties will have the option of appealing, which may take us into 2009. We are of the opinion that after the WTO has taken a decision in the two cases, it would make sense to discuss with the United States how to manage the resulting implications, but we cannot be sure that that will result in proper negotiations of course.
In conclusion, as far as the Commission is concerned, a negotiated solution would provide the necessary long-term solution the market requires to ensure peaceful and fair competition in the aviation sector in the future. Failing that, the Commission will continue to defend Europe’s interests resolutely and vigorously in the WTO.
After all, it is not only in the interest of Airbus to be able to compete fairly, but also suppliers, airlines and their customers, who should benefit from healthy competition between the major civil aircraft manufacturers.
The competition between Airbus and Boeing should happen in the marketplace: we expect it to be tough but also fair and reasonable competition. However, this is not the case if the US competitor attempts to portray some of our Member States as, and I quote, ‘unreliable aerospace business partners and a security risk to US military readiness’, or to instigate legislation in the US Congress to block funds for improvements of US airports to accommodate the A380. This sort of campaigning is damaging to trans-Atlantic relations and inappropriate for a company that portrays itself as a global (and sometimes even European) player whenever it suits its needs.
However, the message we would like you to take home today is that on an official level both the EU and the US have made an effort – and have, I believe, managed – to ensure that this dispute does not damage the wider EU-US partnership.
We intend to keep it that way and we trust that the US Government will do the same by ensuring that the Airbus/Boeing disputes are not allowed to affect either company's ability to compete fairly in public procurement competitions. Notably, there should be no anti-competitive actions in legislation or executive policy that would restrict the ability of EU companies to compete in the current US aerial tanker recapitalisation programme.
We would like to stress the important role the European Parliament and the national parliaments in the relevant countries can play in monitoring the situation. Your inter-parliamentary contacts will be very precious in bringing this message across the EU and possibly the Atlantic.
Much ink has been spilled over these matters so let us start by recalling the key facts. What is at issue? The US Government claims that money that the European governments have invested in Airbus infringe WTO rules on subsidies. In October 2004 the United States, unilaterally and without prior notice, withdrew from a bilateral agreement signed with the European Union in 1992, which explicitly authorised this type of investment, and the US decided to being a case in the WTO.
The European Union noted that the United States preferred litigation over negotiation and for its part asked the WTO to declare illegal the US subsidies granted to Boeing. Where are we now, three years later? Despite several attempts in the last few years to resolve the dispute amicably, the parties’ differences have prevented this from happening.
The United States has denied giving subsidies to Boeing, and has said that prior to any negotiations the European Union would as a precondition have to stop giving Airbus the support previously provided under the system of repayable loans.
You will appreciate that under these conditions it is impossible to establish a fair and balanced basis for a negotiated settlement. A few weeks ago Boeing publically rejected the latest olive branch, if I can call it that, proffered by Airbus. That was on 18 October.
We are therefore sceptical whether this dispute can be resolved at the negotiating table any time soon. This means that we will continue to defend in the WTO European support for Airbus, which has enabled the aviation sector to become more innovative and to improve the safety and efficiency of air travel.
It is important to note that Airbus has paid back 40% more than it has received from the European governments since 1992 and has actually repaid in excess of EUR 7 billion. We hope, therefore, that the panel will demonstrate that the quite modest sums that Europe has granted in the form of aid for research and development and repayable loans have not had any impact on Boeing’s ability to compete.
I think you can probably judge for yourselves: Boeing has just announced that its new B787 ‘Dreamliner’ has since its launch become the most commercially successful plane in history. The most successful plane it may be, but it is also perhaps the most heavily subsidised.
Ahead of a WTO hearing in September this year, we provided what I believe was solid evidence of the subsidies the United States gave to Boeing for that aircraft. We showed in particular that this financial aid totalled $24 billion from the federal authorities and certain states, including $16 billion from NASA and the Department of Defence in the form of support for research and development in the aviation sector that enabled Boeing to develop state-of-the-art aviation technologies and know-how at no cost. In addition, illegal, state subsidies designed for the exclusive benefit of Boeing were granted, notably in Washington State, where Boeing received subsidies totalling $4 billion, but also in Kansas, through ‘Boeing bonds’, and in Illinois. The third element is the illegal export subsidies that Boeing continues to receive under the legislation on FSC/ETI (Foreign Sales Corporation and Extraterritorial Income Exclusion), in spite of the fact that the WTO has outlawed them on several occasions."@en1
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