Saturday, April 02, 2011

Gaming the system

The European Union, we are told, has launched an appeal against a WTO ruling that the United States gave aircraft maker Boeing billions of dollars in illegal subsidies, after claiming victory in the dispute.

"The EU has chosen to quickly appeal technical elements of the ruling for legal strategic reasons," said John Clancy, spokesman for EU trade commissioner Karel De Gucht. "The EU's victory in this case against Boeing remains very clear for all to see," he said, referring to the WTO finding that state aid provided by Washington reached at least $5.3 billion (3.75 billion euros).

This is the latest move in a seven-year-old battle that saw last June a partial victory for Boeing, when the WTO accepted three out of seven claims by Washington that Airbus had effectively received illegal export subsidies. But both sides have appealed that ruling, so nothing has actually been resolved and, apparently, "a much bigger appeal" from Washington on the Boeing case is in the works.

You can here have some (little) sympathy with the media in giving up on this case. In many respects, both sides are as bad as each other, and both are gaming the system, to extract maximum advantage and to spin the proceedings out as long as possible. Likely, by the time they come to a resolution- if at all - most people will have forgotten what the original disputes were about.

What this basically says though, is that the system is not working ... or, at least, it is not working as intended. The effective outcome is that, if the big battalions are absolutely intent on subsidising their aviation industries, they will do so come what may, no matter what their "international obligations" are, and what any treaties might say.

Now isn't it a pity that the UK – which is a major player in the Airbus subsidy scam – could not take an equally "realistic" view of the EU treaties.