The WTO’s Dispute Settlement Body is set to hold a
special session this Friday in order to hear the US’ request that a panel
review whether the EU has complied with an adverse ruling in the high-profile
Airbus case (DS316).
Indeed, the WTO’s Appellate Body found that EU
member states were providing civil aircraft manufacturer Airbus with subsidies
that violated WTO law nearly a year ago.
Brussels claimed to have come into compliance with
this ruling late in 2011, issuing a report that detailed thirty-six measures
taken by its members in that regard.
However, after reviewing the report, Washington
argued that the illegal subsidies had not been fully withdrawn; the US is
asking the WTO for authorisation to impose US$7 to 10 billion in countermeasures
in response.
The WTO has already appointed an arbitrator to
oversee the US countermeasures claim, but the US has agreed to suspend
countermeasure proceedings until after the WTO compliance panel makes an
independent evaluation on whether the EU has complied with the Appellate Body
decision.
Recently, the Appellate Body has also found the US
guilty of illegal financial support for its own aerospace manufacturing giant,
Boeing.
However, the Boeing case’s ultimate finding of
around US$5 billion in illegal subsidies against the US is much smaller than
the Airbus ruling. Also, the timeline for the Boeing case is several months
behind the Airbus decision.
These points have allowed the US to push ahead on
compliance and countermeasures at the WTO ahead of the EU, which must wait
until September for the US to demonstrate its own compliance with regards to
Boeing.
A bilateral negotiation between the two sides remains
the parties’ only option for avoiding an arduous eye-for-an-eye countermeasures
process that would likely hurt bystanders like Canada and Russia.