Digging in for a new trade war with Washington, the European Union (EU) filed a counter complaint yesterday at the World Trade Organization...
BRUSSELS, Belgium — Digging in for a new trade war with Washington, the European Union (EU) filed a counter complaint yesterday at the World Trade Organization (WTO) claiming that U.S.-based Boeing receives illegal government aid.
EU Trade Commissioner Peter Mandelson said he had little choice but to retaliate because the United States closed the door on reaching an amicable solution to the standoff between Boeing and France-based Airbus.
“The path of negotiations has been closed,” Mandelson said, blaming the United States after the Bush administration decided late Monday to abandon negotiations that began in January and take the EU to a legal panel at the WTO.
Mandelson said the WTO action could only rupture fragile EU-U.S. ties, adding that taking the talks to the WTO would accomplish nothing.
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“America’s decision will, I fear, spark the biggest, most difficult and costly legal dispute in the WTO’s [10-year] history,” he said, adding that it would be “manifestly expensive and [involve] quite destructive litigation.”
Analysts said any WTO-imposed cuts in aid to the two companies could result in higher ticket prices for travelers.
“If there are fewer subsidies for manufacturers, that will transfer into higher costs for carriers and, ultimately, the traveling public,” said aviation analyst Richard Aboulafia of Fairfax, Va.-based Teal Group.
Boeing spokesman Dick Dalton countered Aboulafia’s claim by saying in an e-mail that an end to subsidies would “ensure true competition — to the ultimate benefit of airlines, passengers, parts suppliers and the airplane manufacturers.”