EU gains weapon in battle over subsidies

[tocqueville]

By James Kanter International Herald Tribune

FRIDAY, SEPTEMBER 30, 2005

PARIS The World Trade Organization on Friday ruled against a multibillion-dollar tax break for American companies that had been challenged by the European Union, renewing the prospect of up to $4 billion in sanctions on exports from the United States to Europe.

The EU trade commissioner, Peter Mandelson, immediately seized on the decision as adding to Europe's ammunition in another bitter trans-Atlantic dispute, this one over how Americans and Europeans support their rival commercial aircraft makers Airbus and Boeing.

Mandelson said the U.S. tax breaks were "unacceptable in view of the large benefits involved," especially to Boeing, and that maintaining those benefits was hypocritical at a time when the United States was asking Europe to curb subsidies to Airbus.

The tax breaks found illegal by the WTO would grant Boeing a $750 million windfall over the next decade, according to Mandelson. European officials said Boeing had benefited from similar tax breaks since 1995 that added up to about $1.6 billion.

http://www.iht.com/articles/2005/09/30/business/subsidy.php