A big trade ruling in the long battle between Airbus and Boeing left both sides cheering. The WTO said Tuesday that the EU helped Airbus with unfair subsidies that hurt sales of Boeing's wide-body jets. But the organization also overturned a previous ruling that found the subsidies were hurting sales of the single-aisle 737, Boeing's most popular plane. US Trade Representative Robert Lighthizer said the decision "confirms once and for all that the EU has long ignored WTO rules, and even worse, EU aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue." He said that the US would impose tariffs if the EU doesn't follow international trade laws. That would be an escalation at a time when US relations with trading partners are already tense. But the European Union said it planned to take "swift action" to align with the WTO's recommendations. The rivals are in fierce competition for plane orders. Airbus booked more orders last year, but Boeing delivered more planes. "This is a high-stakes battle," said Douglas Holtz-Eakin, president of the American Action Forum Tuesday. As airlines expand into the Middle East and China, both companies will be vying for new business, he said. <br/>
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France will respect its international commitments to comply with a WTO ruling on Tuesday against EU subsidies to Airbus, the French government said. The WTO said the EU had failed to remove support for the world’s largest airliner, the A380, and Europe’s newest long-haul plane, the A350, causing losses for US rival Boeing and US aerospace workers. “With the European Commission and out of respect for international trade rules, France confirms its intention to respect its international commitments by soon adopting new compliance measures,” the foreign, finance and transport ministers said in a joint statement. It added that the French government would closely watch a WTO decision expected in 2019 on U.S. aid to Boeing in a parallel case.<br/>
The WTO ruled Tuesday the EU had maintained illegal support to Airbus, prompting the US to threaten sanctions against European products in the first of two key aircraft subsidy decisions due this year. The WTO report coincides with mounting trade tensions over US aluminium and steel tariffs and the impact on European firms of Washington’s decision to exit the Iran nuclear pact. It is also part of a two-way battle between the EU and the US over aircraft subsidies that could spark tit-for-tat reprisals between the two trade superpowers. The WTO’s appeals body said the EU had failed to remove subsidised government development loans for the world’s largest airliner, the A380, and Europe’s newest long-haul jet, the A350, causing losses for Boeing and US aerospace workers. But the Geneva watchdog dismissed US claims that loans for Airbus’s most popular models, the A320 and A330, were also costing Boeing significant sales and in so doing narrowed the scope of one of the world’s longest and costliest trade spats. US Trade Representative Robert Lighthizer said the US would slap countermeasures on European goods unless the EU stopped “harming US interests”. WTO rules allow it to target any industry since all goods fall into one category.<br/>
In what appears to be a divergence from the terms of the US and United Arab Emirates (UAE) new Open Skies side agreement, a top White House official told industry stakeholders that there is a freeze on adding routes to the US. Peter Navarro, assistant to US President Donald Trump and director of the White House Trade Council, told aviation industry stakeholders during a briefing May 14 that the UAE had committed to a freeze on fifth freedom routes to the US as part of their agreement to continue the two governments’ Open Skies pact, signed in 2002. “There will be no additional routes into the United States until further notice,” Navarro said. “That’s a promise that will be kept.” But he added the freeze applied only to passenger airlines, not cargo carriers. FedEx operates fifth freedom rights via Dubai, while Dubai-based Emirates Airline operates two fifth freedom routes, from Italy and Greece, to the US. Etihad Airways does not operate any such routes. Navarro’s statements, however, do not sync with UAE government statements, which say the Open Skies agreement remains fully intact. Nor do they fit with the side document recording main points agreed which makes no mention of route freezes or fifth freedom restrictions.<br/>