April 14, 2011 / 4:54 PM / 8 years ago

US to 'protect interests' in WTO Boeing ruling

* U.S. points to subsidy accusation against Airbus

* Kirk says decision on sanctions against EU to come later

By Andrew Stern

CHICAGO, April 14 (Reuters) - The U.S. Trade Representative left little doubt on Thursday that the Obama administration would appeal a World Trade Organization ruling that Boeing (BA.N) received illegal government subsidies.

Ron Kirk promised to “protect our interests” when asked on the sidelines of a speech in Chicago whether the administration would appeal the March 31 ruling that Boeing received at least $5.3 billion in illegal subsidies in the long-running dispute.

“We don’t discuss our legal strategies in the WTO but we are examining that role and making sure we protect our interests,” Kirk told reporters. “If you look at the fairly aggressive posture we’ve taken over the last 14 years, I think you can draw a reasonable conclusion” about an appeal of the WTO ruling.

Kirk emphasized that the WTO had ruled previously that Boeing rival Airbus EAD.PA had received at least $20 billion in illegal subsidies, a ruling that both sides have appealed.

Analysts have anticipated a U.S. appeal of the Boeing ruling, which the European Commission hailed as a “clear-cut victory.” Europe also appealed because it believes the subsidies to be higher.

The United States was unlikely to accept the Boeing decision to put pressure on the European Union to accept the Airbus ruling, the analysts said.

Looking ahead, Kirk said any decision on imposing trade sanctions on EU goods would come later, likely after the appeals process plays out and the EU weighs its options. Alternatively, the EU could institute a “cure” to the subsidy problem, he said.

The WTO appellate body is expected to issue its decision in the Airbus case in late April, although decision dates frequently slip at the WTO.

Once that ruling comes, the United States will have a timing advantage in the dispute because the EU could soon face U.S. retaliation if it does not move quickly to eliminate any subsidies left standing by the appellate review.

Many analysts believe the two sides will eventually negotiate a settlement, rather than hurl sanctions potentially affecting billions of dollars and possibly setting off a trade war.

A deal also would bolster U.S. ties with Europe at a time when both face increased competition from emerging economies such as China, India and Brazil.

“A negotiated resolution would be the best thing,” Kirk said. “But we will not yield on our position that the European Union has to allow Airbus to go out and compete on commercially acceptable terms.”

Additional reporting by Doug Palmer in Washington; Editing by Bill Trott

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