Thursday, October 07, 2004

Bring on the grown-ups

The is almost something childish in the current developments in the ongoing dispute between the US and the EU over the Airbus-Boeing subsidies.

Having put a reasoned – if not reasonable - case to the EU about unfair subsidies for Airbus projects, US negotiators have met with a child-like barrage of "yah-boo-sucks – you do as well" retorts from EU negotiators, with not even the remotest attempt to resolve the underlying dispute.

Given this response, the US had little choice but to lodge a formal complaint with the WTO, which it did yesterday, terminating the bilateral 1992 civil aircraft agreement.

In classic tit-for-tat mode, the EU then filed its own complaint with the WTO, claiming that Boeing had received unfair subsidies from the US government, and now the whole case is bogged down in a welter of acrimony.

Outgoing trade commissioner Pascal Lamy condemns the US complaint with a studied insult, claiming it is "obviously an attempt to divert attention from Boeing's self-inflicted decline", while US trade negotiator Robert Zoellick is sticking to his guns, arguing that "Since its creation thirty-five years ago, some Europeans have justified subsidies to Airbus as necessary to support an 'infant' industry. If that rationalization were ever valid, its time has long passed."

Under WTO rules, the two sides now have 60 days to try to reach an agreement before an independent panel is set up to examine the dispute. But, as it stands, it looks like the dispute will go all the way, the result of which, at this stage, is impossible to determine. Either way, though, it would be nice to have some grown-ups on board.

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