BRUSSELS, Belgium – The European Union said Tuesday it will accept cuts in subsidies for Airbus Industries only if Washington, D.C., reduces aid for the Boeing Co.
“We would not accept this unilaterally,” EU spokeswoman Arancha Gonzalez said ahead of Thursday’s negotiations between EU and U.S. officials.
The negotiators will review a 1992 trans-Atlantic accord that limits subsidies for the world’s two largest plane makers to 33 percent of the production costs for new models. Allegations of unfair subsidies for Airbus and Boeing have long been a feature of trans-Atlantic friction.
In August, President Bush said his administration would challenge “unfair” EU subsidies at the World Trade Organization.
Washington has long complained that Airbus receives government loans at below-market rates to launch products – something the EU denies – and doesn’t have to repay them if a new model is unprofitable. Roughly one-third of the $13 billion cost of developing Airbus’ A380 aircraft, for example, came from what Airbus calls “refundable launch aid.”
In turn, the EU says Boeing has long enjoyed the benefits of the U.S. government’s contracts in defense, space and transport. Also, in 2003, Washington state offered Boeing a $3.2 billion incentive package to secure the Everett assembly plant for Boeing’s new 7E7 Dreamliner.
Boeing spokesman Dick Dalton said the company’s military sales in 2003 were smaller than the combined military sales of Airbus’ parent companies, European Aeronautic Defense &Space Co. and BAE Systems PLC.
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