Planemakers Airbus and Boeing Co. on Tuesday took the edge off some of the rhetoric in the world’s biggest potential trade war, striking a conciliatory tone at the Paris Air Show.
Airbus said the reason it had delayed its A350 model was to calm tensions and Boeing Co. said negotiations were the best way forward.
Washington’s clash with the European Union at the WTO involves accusations of improper state subsidies to the largest aerospace company on each side.
In a conciliatory sign from the European side, Airbus Chief Executive Noel Forgeard for the first time on Tuesday said a delay in plans to launch the industrial phase of its new A350 model was intended to help clear the atmosphere.
“To give a chance for an amicable settlement we decided to postpone the launch until September,” Forgeard told a news conference.
“The fact that we are trying to reach an amicable settlement doesn’t mean we will compromise on our conditions for a settlement. Boeing is receiving huge government money.”
Airbus first announced the launch a new mid-sized cruiser, the A350, last year but has been forced to redesign it in the face of tough competition from Boeing’s similar 787 Dreamliner.
While technical glitches and a shortage of engineering resources are also seen pushing back the start of work on the A350, Forgeard’s suggestion of compromise was a fresh nuance in a transatlantic war of words that has lasted more than a year.
Thomas Pickering, a former influential U.S. ambassador who now serves as Boeing’s senior vice president for international relations, also held out hopes for a negotiated settlement in an interview with Reuters.
“The idea is not to punish Airbus, it is to get future trade where we can compete on equal terms,” Pickering said.
“Based on what’s been in the media, Airbus look willing to give up launch aid in return for putting a consideration of indirect subsidies on the table, and that’s been our position forever,” he said.
Planemaker Airbus risks having to turn billions of euros in state loans into conventional bank loans if the World Trade Organization backs a complaint filed by Washington.
“It could conceivably cover all loans that are unpaid,” Pickering said, referring to launch loans which Airbus has received for decades from European governments and used to help develop new models.
Most have been repaid, but Airbus has not yet begun to deliver the A380 superjumbo which has cost $14.5 billion to develop and is planning another $5.4 billion program to build the mid-sized A350.
Boeing could also benefit if the WTO backs the U.S. case against the EU and finds merit in its claims that European state loans have helped Airbus gain market share from Boeing.
A WTO ruling then could grant Washington the right to impose penalties against the EU tied to the value of the market share Boeing has lost to Airbus.
“What we can prove is real injury from launch aid,” Pickering said, in reference to lost market share.
The European planemaker could also benefit if the WTO backs its case, which targets tax breaks and benefits which Boeing receives from U.S. military contracts.
The WTO is set to appoint boards to assess the two cases, which threaten to spark the biggest trade dispute in the WTO’s 10-year history.
“It’s either litigation plus negotiations or just litigation,” Pickering said.
The United States pulled out of a bilateral agreement with the EU on aerospace subsidies late last year, taking action a year after Airbus had pipped Boeing in sales of airliners for the first time.
A three-month truce ended in April, leading both sides to file cases with the WTO.
