Airbus says it will obey WTO ruling on aircraft subsidies

A European Commission document said Airbus would repay an A350 loan to the UK government this year and reduce the drawdown of other loans. (Reuters)
Updated 22 May 2018
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Airbus says it will obey WTO ruling on aircraft subsidies

PARIS: Airbus plans to set out measures that will bring it into line with a World Trade Organization ruling on subsidies for its A350 and A380 jets, a senior lawyer said on Tuesday.
The move comes after the US won the right to seek sanctions against EU goods following a partial victory in its 14-year legal battle against European government support for Airbus at the World Trade Organization.
The EU says it expects to strike a similar legal blow in a parallel case on US support for Boeing later this year.
“We will be announcing this morning a complete package of measures to fully comply with last week’s ruling, putting us basically at a point where we have nothing left to answer and no sanctions possible,” Karl Hennessee, senior vice president and head of litigation at Airbus, told BBC radio’s Today program.
The subsidies row coincides with transatlantic tensions over US aluminum and steel tariffs, and the impact on European firms from Washington’s decision to exit an Iran nuclear pact.
It is also part of a two-way battle between the EU and the US over aircraft subsidies that could spark tit-for-tat reprisals between the two trade superpowers.
In a rare public face-off between senior strategists in the dispute, Boeing’s chief external lawyer in the case told the same BBC program that the US would be free to target any European products, not just aerospace.
“The WTO will decide what the proper number is and ... give the US that authority,” Robert Novick, co-managing partner at US law firm WilmerHale, told the BBC Today program.
“In parallel, the US will develop a list of products on which it might consider imposing countermeasures,” he added.
The transatlantic dispute stems from mutual claims that the world’s two largest planemakers benefited from illegal subsidies in the form of subsidized government loans to Airbus and research grants or tax breaks to Boeing.
Underscoring the cost and complexity of the case, the two sides have been arguing since 2011 about whether they complied with earlier rulings.
Airbus did not say how it would comply with the final ruling on European aid but a European Commission document said it would repay an A350 loan to the UK government this year and reduce the drawdown of other loans.
It also said the bankruptcy of Russian carrier Transaero, resulting in fewer A380 deliveries, had helped it to comply, while other aid been blunted by the passage of time — an argument that has previously been rejected by the US.
Hennessee also called for a settlement similar to one between Canada and Brazil that set the tone for global plane financing.


Davos 2019: Mideast CEOs turn gloomy on global economy, PwC study finds

Political and business leaders are gathering in the mountain resort of Davos in Switzerland this week. (AP)
Updated 38 min 49 sec ago
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Davos 2019: Mideast CEOs turn gloomy on global economy, PwC study finds

  • The loss of confidence from regional CEOs was the second biggest fall in the world, beaten only by North American bosses, whose optimism fell from 63 percent to 37 percent

DAVOS: Chief executives in the Middle East are much less confident on prospects for the global economy than they were in 2018, according to a report from accounting and consulting group PwC.

The firm’s annual survey of top bosses’ attitudes, traditionally launched on the eve of the World Economic Forum Annual Meeting in Davos, showed a big drop in the number of CEOs from the region who believe global economic growth will improve in the next 12 months.

Only 28 percent of Middle East business leaders now see an improvement in economic prospects, compared with 52 percent this time last year. Bob Moritz, global chairman of PwC, said: “The prevailing sentiment this year is one of caution in the face of increasing uncertainty.”

The loss of confidence from regional CEOs was the second biggest fall in the world, beaten only by North American bosses, whose optimism fell from 63 percent to 37 percent.

PwC said that the Middle East decline was due to “increased regional economic uncertainty,” while the North American fall was “likely due to the fading of fiscal stimulus and emerging trade tensions.”

The results of the PwC poll - conducted among 1,300 business leaders around the world - reflected an overall decline in business confidence in each region surveyed. Last year, only 5 percent of CEOs said that global economic growth would decline. For 2019, this has jumped to nearly 30 percent.

Globally, confidence in CEOs’ own companies to grow revenue this year has also fallen sharply. Moritz said: “With the rise in trade tension and protectionism it stands to reason that confidence is waning.”

The US retains its lead as the top market for growth among international investors, but many CEOs are turning to other markets, or investing at home. The ongoing trade conflict between the US and China has resulted in a sharp decline in the number of Chinese bosses chosing the US as a market for growth, down from 59 percent last year to only 17 percent for 2019.

Globally, CEOs are still more worried about the threat of over-regulation of their businesses - named as the top concern again in 2019 - but uncertainty about policy has become a major issue too.

In the Middle East, the main concern is geopolitical uncertainty, followed by the threat of cyberattack, policy uncertainty and the speed of technological change.