Clash of the Titans Prospect of a big trade war between US and EU

[seemslikeadream]

Prospect of a big trade war between US and EU looms with filing of complaints with WTO over subsidies to Airbus and Boeing

By Andy Ho

THE United States looks set on a collision course with the European Union (EU) over their aircraft industries. In recent months, the two giants have been unable to agree on how best to replace a 1992 bilateral pact that sets limits on government support for their respective aircraft manufacturers.

The 1992 pact limited EU subsidies to Airbus to 33 per cent of a new plane's development costs, while indirect support to Boeing from the Pentagon and National Aeronautics and Space Administration (Nasa) was restricted to 4 per cent of its turnover. The US government, egged on by Boeing, now wants a new deal to ban all state aid, but the EU won't play ball.

Early this month, the US unilaterally terminated the pact, claiming that the EU had given Airbus subsidies amounting to US$3.2 billion (S$5.4 billion) to produce its new super-jumbo, the A380. At the same time, the Americans also filed a World Trade Organisation (WTO) complaint challenging those very subsidies.

On its part, the EU said it regarded the 'purported abrogation as invalid'. Not to be outdone, however, the EU also filed its own WTO complaint over US subsidies to Boeing which, it said, had amounted to US$18 billion in direct and indirect aid from 1992.

more
http://straitstimes.asia1.com.sg/think/story/0,4386,278547,00.html

[madrchsod]

1. interesting....

a local manufacter has the contract to supply the wing frames for an airbus airplane....

[seemslikeadream]

2. Airbus to set up US plant in tanker bid

Airbus to set up US plant in tanker bid
Dominic O’Connell

AIRBUS is planning to set up a plant in America as part of a bid to wrest a $23 billion (£12.75 billion) US Air Force tanker aircraft contract from rival Boeing.
Noel Forgeard, chief executive, said Airbus and Eads, the Anglo-French defence company that is its major shareholder, would seek a US partner to front the bid.

Airbus would finish the tankers to a basic standard — known in the industry as “green” aircraft — and fly them to America for final fit-out.

American workers would install expensive refuelling equipment, interiors and even new engines.

Analysts say Lockheed Martin, the leading US defence contractor, is favourite to partner Airbus for the contract.

Forgeard’s US plans are likely to fuel the trade row between America and Europe over commercial aircraft.

more
http://www.timesonline.co.uk/article/0,,2095-1312989,00.html

[Ohio rules]

3. How many jobs will go overseas?

Should the US govt stop subsidizing Boeing and allow Europe to keep Airbus from crashing?
What impact would that have on the Seattle area if funding stopped?