EU, US hold talks in Airbus aid dispute

The United States and the European Union were holding talks in Geneva on Friday, a trade official said, after Washington accused EU governments of failing to eliminate illegal subsidies to Airbus. The US has threatened multi-billion dollar sanctions against the EU, which it says has not fully complied with a WTO ruling against subsidies to the aircraft maker. "The European Union and the United States are holding formal consultations in the Airbus case following the publication of the EU's compliance report of December 1, 2011," said EU trade spokesman John Clancy, without commenting further. The EU accepted a US request for talks last month. If no agreement is reached Washington can then ask for a special panel to be established to review the EU's compliance package. The US is seeking permission to impose on the EU an estimated $7 billion to $10 billion (5.3 and 7.6 billion euros) in trade sanctions annually. This request has been referred to arbitrators whose role it is to rule on the level of retaliation. The WTO said on Friday that arbitrators had been officially appointed in the latest stage of the seven-year-old dispute. In June the Dispute Settlement Body ruled that some subsidies, including launch aid to Airbus, had caused "serious prejudice" to US interests and gave the EU six months to end the unfair aid. A parallel EU complaint against US aid to Boeing is also wending its way through the WTO dispute process, with a possible ruling in February. The cases were filed within an hour of each other in October 2004. EU trade commissioner Karel De Gucht said in December that the EU and the US were "both guilty" in the affair as they had "both taken government action" to support their aircraft industries.