US to file case against EU in WTO as Airbus subsidy row deepens

America is prepared to take its case over alleged unfair subsidies for aircraft under development by the European aerospace giant Airbus to the World Trade Organisation next week.

Germany, France, the UK and Spain are in talks to provide 3.3 billion euros in loans to support the development of Airbus's A350 long-range aircraft, which would compete with Boeing Co.'s 787 and 777 models.

"If they do move forward, we will respond quickly and swiftly and file another action within the WTO,"  US trade representative Ron Kirk said a press conference in Paris yesterday.

The Airbus partners on June 15 agreed to give themselves a month to decide on reimbursable government funding for the long-haul A350.
France said it was considering aid of 1.4 billion euros, and Germany up to 1.1 billion.

Airbus is the world's largest producer of civil jetliners, having overtaken former market leader Boeing. The two companies are locked in a transatlantic trade row over subsidies at the WTO, with both accusing the other of taking illegal government handouts.

 In January 2009, Airbus said a French plan to provide up to 5 billion euros to support plane purchases would help secure aircraft deliveries as government aid for the ailing economy spreads beyond banks and cars (See: France pumps in $6.5bn to bail out Airbus).