Bob Novick, a legal counsel for Boeing, said that by participating in the 1992 agreement, the company expected Airbus to see the start-up assistance over time. But until 2004, despite Airbus` control over more than half of the global market for large commercial aircraft, Boeing saw no sign of it. The giant A380, which was only made possible by $3.5 billion in start-up aid from France, Germany, Spain and Britain, and was supposed to kill the 747, was about to be deployed. In accordance with today`s decision to move forward in a WTO case, the United States also exercised its right to denounce the agreement under the terms of the 1992 agreement. While the United States remains committed to resolving this issue through the negotiation of a new bilateral agreement, we have come to the conclusion that the filing of a WTO case is necessary at this stage to ensure, in one way or another, the establishment of the conditions of competition. The WTO is setting up an agreed multilateral forum for the settlement of trade disputes in accordance with agreed rules. After 12 years, the United States believes that the 1992 agreement has survived its usefulness and must end. Instead, the 1992 agreement, which is expected to lead to a gradual reduction in subsidies, has become an excuse for EU governments to continue subsidising Airbus. The $3.2 billion start-up aid promised by EU governments for the new Airbus A380 is the main funding allocated to a single project.
The EU provided additional loans and infrastructure, bringing the total amount of A380 grants to about $6.5 billion. Airbus is now considering introducing another competitor (A350) for the recently launched Boeing 7E7 and has indicated its intention to also apply for subsidies for the aircraft. Europe also regrets that Boeing has received start-up assistance from Japan, where much of the 787, including most of the wing, is produced. It estimates that up to $7 billion in public assistance of one kind or another has been injected into the 787. Airbus chief Tom Enders calls the 787 the most subsidized civilian aircraft in history. Airbus also notes that, since 1992, Airbus has paid governments 40% more than they received from them, thanks to interest and royalties on successful projects developed with state aid. Over the average year, it repays about $500 million. In 2004, at the request of Harry Stonecipher, then head of Boeing, America announced an agreement with the European Union governing state support for the commercial aircraft industry and launched a dispute settlement procedure within the WTO.
