Your Say

07/02/2006
US argues over £5.2m Assembly jobs grant for Airbus
Western Mail

An Assembly Government funding package to train Airbus workers has inflamed a dispute between the United States and the European Union.

US Trade representative Rob Portman has condemned the £5.2m grant as a state subsidy and complained to the World Trade Organisation.

The funds - announced at the end of last month - are to train staff who will work on the Airbus 350. The plane pits the European company in direct competition with Seattle-based Boeing.

For nearly two years, the US has been pursuing a WTO case against European state aid for the aviation sector, and it has warned it cannot be resolved unless all subsidies end.

The Assembly Government yesterday said, 'This was not a state aid specifically directed towards the civil aircraft sector but a grant offered towards the creation of 650 jobs in the Welsh assisted areas.'

The Airbus factory in North Wales employs more than 6,000 people and specialises in the manufacture of wings.

Welsh Conservative MEP Jonathan Evans, who leads discussions on the dispute between the European Parliament and the US Congress, said the Assembly Government's grant had been made with little consultation and had complicated one of the world's most serious trade disputes.

He said, 'I think the support under the European rules is justifiable but there needs to be a little finesse about how these matters are handled.'

Mr Evans said he had been informed 'barely a fortnight' before the official announcement and was concerned about the political judgment of the Assembly Government.

However, Labour MEP Eluned Morgan accused the United States of 'a huge degree of hypocrisy' - claiming that Boeing received indirect subsidies through its contracts with Nasa and the US Department of Defense.

She said, 'They give massive amounts of money to blue-sky research and they put the technology developed as a result of that into the aircraft.'

Ms Morgan also defended the Assembly Government's decision to give the grant at this time.
'This case has been rumbling on for years and there is no end in sight ... We just can't afford to lose the momentum and training is everything.'

Patrick Minford, an economics expert at Cardiff University, agreed Boeing had been able to spin-out military technology for civilian use and advised the European players not to back down.

He said, 'They should suck it and see. They may well get away with it.'

Despite speculation that China and India will become major rivals to Europe and the United States in the aerospace industry, he cautioned against ceding the field to low-cost competitors.

He said, 'It may well be that in 20 years' time you will have these countries getting into it [but] Russia got into it and their success has been fairly qualified. I don't think anybody wants to fly in their planes.'

The transatlantic dispute centres on the US complaint that European countries have given launch aid of around £8.5bn for the A350, the A380, and earlier aircraft. The EU is demanding that a panel of investigators be permitted to investigate the US industry's contracts with Nasa and the defence sector.

Boeing and the Office of the United States Trade Representative were invited to comment but did not respond.

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