The United States made the following two statements at the April 13, 2012 meeting of the WTO Dispute Settlement Body.
1. UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL
AIRCRAFT (SECOND COMPLAINT)
A. IMPLEMENTATION OF THE RECOMMENDATIONS OF THE DSB
• On March 23, 2012 the Dispute Settlement Body (DSB) adopted its recommendations and rulings in this dispute United States – Measures Affecting Trade in Large Civil
Aircraft (Second Complaint), DS353.
• This morning, as provided in the first sentence of Article 21.3 of the DSU, the United States is informing the DSB that the United States intends to implement the recommendations and rulings of the DSB in this dispute in a manner that respects U.S.
WTO obligations.
• The United States intends to do so within the time frame established in Article 7.9 of the SCM Agreement.
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2. EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES
AFFECTING TRADE IN LARGE CIVIL AIRCRAFT
A. RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE UNITED STATES:
REQUEST FOR THE ESTABLISHMENT OF A PANEL (WT/DS316/23)
• On June 1, 2011, the Dispute Settlement Body (DSB) adopted its recommendations and rulings in this dispute, EC – Large Civil Aircraft. The DSB recommended that the Member granting each subsidy found to have resulted in adverse effects bring that subsidy into compliance with its obligations under the SCM Agreement.
• Under Article 7.9 of the SCM Agreement, the EU and certain member States had six months from the date of adoption of the recommendations and rulings of the DSB to withdraw the subsidies or take appropriate steps to remove the adverse effects of the subsidies. That six-month period ended on December 1, 2011.
• In the view of the United States, it appears that the EU and certain member States have failed to comply with the recommendations and rulings of the DSB both within that period and thereafter.
• On December 9, 2011, the United States requested consultations with the EU in an effort to provide the EU with a further opportunity to explain how it had complied with its WTO obligations.
• The consultations, however, did not resolve the dispute. The United States remains concerned that the EU and its member States have failed to comply with the recommendations and rulings of the DSB.
• Indeed, the EU has introduced new subsidies, just like the ones condemned by the DSB just last year.
• This is a serious problem. EU subsidies to Airbus are, by any measure, massive and have equally massive adverse effects on the United States.
• Over the six-year period between the initiation of the dispute and the adoption of the reports, the EU denied providing subsidies and denied their effects.
• The Panel and the Appellate Body, however, rejected the EU’s arguments, and the DSB adopted those findings. To be specific, the DSB found that these subsidies caused Boeing to lose sales of more than 300 aircraft and to lose market share throughout the world.
• In fact, in looking at the effect of the EU subsidies, the Appellate Body confirmed the Panel’s finding that among the most plausible scenarios was that “[w]ithout the subsidies, Airbus would not have existed … and there would be no Airbus aircraft on the market. None of the sales that the subsidized Airbus made would have occurred.” (1)
• The EU’s notification of alleged steps to comply with the recommendations and rulings of the DSB shows that it has not changed its behavior in any meaningful way. In fact, the notification acknowledges that the largest launch aid subsidies, for the A380, remain in place.
• Furthermore, the actions the EU claims to have taken with respect to earlier subsidies appear to do nothing to withdraw them, or remove their adverse effects, as required under Article 7.8 of the SCM Agreement.
• And Airbus itself reports that it has received new launch aid for the A350XWB.
• In short, while claiming to have complied, the EU seems to have made the problem worse.
• For these reasons, the United States is requesting that the DSB establish a panel under Article 21.5 of the DSU to examine whether the EU has implemented the DSB’s recommendations and rulings.
• Pursuant to paragraph 2 of the sequencing agreement between the EU and the United States, the EU has agreed to accept the establishment of the panel at this meeting
(1) 1 European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, para. 1264 (adopted 1 June 2011).