video transcript

The message to the US from the European Union's trade chief was loud and clear. Karel de Gucht says America must end subsides to its plane maker Boeing. He was speaking in Geneva after a ruling by the World Trade Organisation's appeal board. (SOUNDBITE) (English) EU TRADE COMMISSIONER KAREL DE GUCHT SAYING: "Not only has the WTO rejected the appeal by the United States, but it has also gone even further. The WTO has found that the U.S. is guilty of past illegal funding to Boeing, worth between five and six billion dollars, and future illegal subsidies of just over three billion U.S. dollars." The board said the subsidies included a contribution of at least 2.6 billion dollars from the space agency Nasa. It allowed Boeing to launch its modern 787 Dreamliner, causing what they called "serious prejudice" to its European rival Airbus. (SOUNDBITE) (English) EU TRADE COMMISSIONER KAREL DE GUCHT SAYING: "EU industry, and especially our aerospace industry, has been harmed to the tune of billions of euros, and that's unacceptable. So what's next? Put quite simply, it's time for the U.S. to stop these illegal handouts, to stop hindering fair competition in this sector and to get in line with international trades rules." The ruling is the latest step in a seven-year dispute which has highlighted illegal practices on both sides. The WTO has in the past ruled that European governments gave illegal subsidises to Airbus. America is currently threatening to hit the EU with sanctions of between 7 and 10 billion a year after a deadline for compliance in the case against Airbus passed last December. Retaliation from both sides is a possibility once the trade procedures have been exhausted. But most analysts expect the row to eventually end with a negotiated settlement. Sonia Legg, Reuters