Washington hopes a WTO report on EU subsidies for Airbus, leaked this week, will help resolve a row over US and European support for their rival aircraft industries by clarifying an appropriate level of involvement. US Trade Representative Ron Kirk said in an interview in Brussels on Thursday that the US would prefer a negotiated settlement to its long-running row with the European Union but the two sides would have to agree to play by the rules.
The confidential World Trade Organisation report, leaked on Tuesday, urged the EU to end what it called illegal subsidies given to Airbus. The report concerns just one of two cases in the trade dispute also involving Airbus' rival Boeing in the multi-trillion-dollar aircraft market.
"If the rulings create a more favourable environment for us to come to the table and negotiate such a settlement, I think that is to the best interest of the United States and the European Union," Kirk told Reuters. The WTO's Airbus report will not be published for several weeks or months as it awaits translation in to French and Spanish, while its ruling on Boeing is due by late June.
Kirk said clear rulings in these cases would guide not only the United States, but also the 27-country EU to a more balanced and WTO-compliant level of support for the industry. The dispute has heightened trade tensions between the United States and the EU, its number one export market with bilateral goods and services trade totalling nearly $1 trillion in 2008, or about $3 billion each day.
Kirk, visiting Brussels to meet European Union officials, said it would be detrimental to businesses on both sides of the Atlantic if the dispute dragged on. "My preference is always to solve problems sooner rather than later because most of our businesses can't survive a 14-year dispute," he said.
Kirk rejected EU allegations that Washington was sliding more and more towards protectionism, arguing that the United States continued to run a huge trade deficit. Last week, the European Union's trade chief said he wanted more engagement from the United States to restart global trade talks and ease fears of US protectionism. "I think we have to be careful when we throw around terms like protectionist, particularly with strong partners with such mutual interests as we have between the EU and the United States," Kirk said.
Kirk said it would be in the interests of the transatlantic partners to move away from their bilateral disputes and keep China engaged in liberalising its market. He reiterated US calls on Beijing to allow its yuan currency to rise. "Where we have been most successful in many cases in getting China to seriously consider our concerns and change their behaviour, we had done so in concert with the European Union, Canada, Mexico, Australia. "I believe that it is going to require all of us collectively to work with China to help them understand how much we will all benefit in allowing the free market to help grow China's economy," Kirk said.