GO
Loading...

UPDATE 2-Europe accuses U.S. of failing to cut Boeing aid

* U.S. said in September it had removed subsidies to Boeing

* EU says Boeing unfairly assisted by gov't research deals

(Adds comment from Airbus)

BRUSSELS, Oct 11 (Reuters) - The European Union accused the United States on Thursday of ignoring a World Trade Organisation instruction to stop subsidising planemaker Boeing and asked the WTO to investigate, prolonging the world's biggest trade dispute.

The United States said last month it had complied with an order to withdraw subsidies to Boeing after the WTO found in March that the U.S. planemaker had received billions of dollars in unfair aid.

But the European Commission, the EU's executive, said Washington had shown no proof that it had complied.

"It is now clear for the European Union that the United States has not only failed to properly implement the decision of the WTO but it has even provided new subsidies to Boeing," the Commission said in a statement.

The Commission said U.S. subsidies were costing European aerospace companies billions of euros in lost revenue. Recent U.S.-EU talks failed to resolve this dispute, the Commission said.

"The U.S. claimed to have removed (the subsidies), but provided no detailed evidence to support its claims," it said.

The U.S. Trade Representative's office said the United States had met a deadline to comply with the WTO's findings. The case, brought by the European Union, was a response to a claim launched by the United States more than seven years ago.

Brussels says Boeing is unfairly assisted by government research deals and other federal and local measures.

The WTO has also ruled against European support to Airbus, which is owned by EADS , in which the French government has a stake and the German government has influence via a holding owned by Daimler .

The United States and the European Union disagree over the ruling against subsidies to Airbus, which the United States says far outstrip any U.S. government support for Boeing.

"Instead of bringing into compliance the massive illegal subsidies that Boeing has received in the past and continues to receive from U.S. federal and state governments ... Boeing has neither paid back nor eliminated the illegal subsidies," said a spokeswoman for Airbus.

The United States has also accused the European Union of ignoring WTO decisions and is threatening up to $10 billion in sanctions.

However, most observers expect the two sides eventually to negotiate a settlement.

(Reporting by Robin Emmott; Editing by Kevin Liffey)

((robin.emmott@thomsonreuters.com)(+32 2 287 6835)(Reuters Messaging: robin.emmott.thomsonreuters.com@reuters.net))

Keywords: EU US/BOEING