The Unfriendly Skies Boeing vs. Airbus. Dounia Bennani Juan Salazar Mike Boniakowski. Presentation’s focus. Analyze the trade frictions between Boeing and Airbus regarding government subsidies and their implications on the commercial aircraft industry.
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(5 a – subsidy causes adverse injury to domestic industry of another member. 5 c- subsidy causes serious prejudice to interests of other member
1 Secure comprehensive agreement to end subsidies on large aircraft
2 Principal shareholders are Airbus and Boeing
3 3 month negotiation window
4 Negotiation will apply to US and EU, could broaden agreement to include others
5 Pledge not to request WTO panels or offer new Gov’t support commitments to aircraft manufacturers during negotiations
6 Use definitions of subsidies in ACSM
7 Enforcement through transparency and DSB procedures
8 Establish agreed-upon terms and conditions for withdrawal from agreement
-During negotiations, the parties will make no new government support commitments for LCA development or production
The agreement will include the U.S. and the EU
Enforcement of compliance to be exercised via increased transparency and Dispute Settlement Procedures
Both parties agree to not request establishment of WTO panels relating to pending disputes
EU unwilling to eliminate subsidies. Will agree to reduce them.
EU unwilling to support standstill of government launch aid during negotiations
EU wants inclusion of Japan in negotiations
Transparency is important to maintain clear channels of communication.US-EU Agreement on Terms for Negotiation to End Subsidies for Large Civil Aircraft (LCA) – Position as of May 31, 2005
Joint Statement of USTR Rob Portman and EU Trade Commisioner Peter Mandelson regarding the dispute over Airbus/Boeing and the WTO (Office of USTR 05/30/2005)
“We remain united in our determination that this dispute shall not affect our cooperation on wider bilateral and multilateral trade issues. We have worked together well so far, and intend to continue to do so.”