PARIS Oct 6 The World Trade Organization has
asked the European Union to hand over documents on the funding
of the Airbus A350 in a potential sharpening of a
transatlantic dispute over aircraft subsidies, a U.S. source
familiar with the case said.
It is the first time the funding of Europe's answer to the
Boeing 787 Dreamliner, due to make its maiden flight next year,
has been drawn directly into the world's largest trade dispute
but it remains to be seen how the WTO will act on the data.
"The WTO has ordered the EU to hand over documents on the
A350 which it did on Friday," the U.S. source said.
Both sides are pressing for major trade sanctions after the
Geneva-based WTO found that Airbus and U.S. rival Boeing
had benefited from billions of dollars of unfair subsidies in a
pair of trade complaints now in their ninth year.
Washington has called on Airbus to stop receiving loans from
its host European nations -- Britain, France, Germany and Spain
-- and argues that the WTO should take loans for the A350 into
account when evaluating penalties for earlier support.
The EU says the carbon-composite jet lies outside the case
and that its funding will comply with the latest WTO decisions.
The U.S. source said outside estimates placed the loans paid
to Airbus for the A350 at around $4.5 billion.
According to the U.S. source, who asked not to be
identified, the A350 funding numbers were supplied on Friday as
part of a WTO compliance procedure. Both sides claim to have
obeyed WTO findings while saying their adversaries have not.
A European source said the WTO panel merely wanted to see
the funding papers to assess whether they were relevant. It has
so far declined to address the A350 payments directly.
No official U.S. or European comment was immediately
The new move comes at a sensitive time for Airbus parent
EADS as it ponders a merger with Britain's BAE Systems
, which has significant interests in the United States.
Recent rumblings in the WTO dispute could offer further bait
to U.S. opponents of the $45 billion merger, which would be
subject to thorough vetting and is expected to draw close
scrutiny from Boeing or supporters in Congress.
Critics of EADS fear the combination of BAE's extensive U.S.
operations and suspected ongoing subsidies to Airbus might give
the group unfair pricing power and damage the U.S. industry.
But most trade specialists doubt the WTO row will be drawn
into the merger approval process and say the CFIUS vetting panel
generally sticks to a pure security mandate. It is not known to
have rejected investment into the U.S. on WTO-related grounds.
The U.S. seeks up to $10 billion in sanctions on the EU for
not eliminating illegal European government support for Airbus.
The EU last month asked the WTO for the right to impose
sanctions worth up to $12 billion annually in retaliation for
U.S. subsidies mostly in the form of research.
Analysts say it could be years before the huge dispute plays
itself out in sanctions or a settlement, while hanging over
U.S.-European relations as a sporadic irritant in other issues.