Boeing v. Airbus spat hits WTO playground

Stephen Beard Mar 22, 2007
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Boeing v. Airbus spat hits WTO playground

Stephen Beard Mar 22, 2007
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TEXT OF INTERVIEW

SCOTT JAGOW: The World Trade Organization is about to hear its biggest case ever. It’s a doozy: The U.S. versus the E.U. Boeing and Airbus. Our European correspondent Stephen Beard joins us. What’s this about Stephen?

STEPHEN BEARD: Well Scott, it does seem to be degenerating into a sort of rather childish playground contest. In this case, the argument is over the size of aircraft subsidies and each side is shouting ‘yours is bigger than mine!’ Today the E.U. is saying that by 2025, Boeing will have received $23 billion in federal, state and local subsidies. Meanwhile the U.S. has already said that Airbus has got $15 billion in aid and that in fact that benefit adds up to $100 billion over the three decades that Airbus has been operating because it’s saved the company from commercial financing costs.

JAGOW: OK but if they’re both doing it, what’s the point of litigating it?

BEARD: Well the somewhat childish answer to that is ‘you started it.’ The U.S. launched this claim in the WTO against Airbus in 2004 and the E.U.’s reaction was to counterclaim. The U.S. says that Airbus has benefited from direct grants of money from European governments, whereas the E.U. says that Boeing has benefited from less direct but nevertheless very substantial state support and it’s got all kinds of tax breaks too. If both companies are forced to pay back all of the alleged subsidies, they would both be bankrupt.

JAGOW: Wow. But that’s not likely to happen, is it?

BEARD: No, of course it isn’t. Clearly the two sides will draw back from the brink and there will be some kind of settlement.

JAGOW: Alright we’ll keep an eye on it, thanks Stephen.

BEARD: OK Scott.

JAGOW: Stephen Beard in London.

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