Truce in the air

The European Union and the United States have agreed to negotiate terms to resolve the dispute which has arisen between them over trade in large civil aircraft.

Government support to Boeing and Airbus, which are the only two major large civil aircraft producers in the world, has been a bone of contention between the EU and US for a number of years.

The EC and the US concluded a bilateral ‘Agreement on Trade in Large Civil Aircraft’ in 1992 which included disciplines and ceilings on the respective types and volumes of support granted by either side.

The US abrogated the 1992 Agreement unilaterally on October 6 and launched the WTO dispute settlement process against alleged European subsidies to Airbus. The Commission launched its own WTO case against subsidies given to Boeing on the same day.

Now, with an agreement in place, the two sparring partners will resolve the dispute between them by negotiation rather than pursuing the dispute through WTO panels.

The negotiations are intended to cover the different types of support affecting the sector, elaborating upon the scope of subsidies as defined by the WTO.

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