WORLD TRADE  
ORGANIZATION  WT/DS316/1 
G/L/697 
G/SCM/D62/1 
12 October 2004 
 
 (04-4274) 
 Original:   English 
 
 
 
EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES –  
MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT 
 
Request for Consultations by the United States  
 
 
 The following communication, dated 6 October 2004, from the delegation of the United States to the delegations of the European Comm unities, France, Germany, Spain and the United 
Kingdom, and to the Chairperson of the Dispute Settlement Body, is circulated in accordance with 
Article 4.4 of the DSU. 
 
_______________ 
 
  My authorities have instructed me to requ est consultations with the Governments of 
Germany, France, the United Kingdom, and Spain (t he "member States"), and with the European 
Communities ("EC"), pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  ("DSU"), Article XXIII:1 of the General Agreement on Tariffs 
and Trade 1994  ("GATT 1994"), and Articles 4, 7, and 30 of the Agreement on Subsidies and 
Countervailing Measures  ("SCM Agreement") (to the extent that Article 30 incorporates 
Article XXIII of the GATT 1994) with regard to measures affecting trade in large civil aircraft. 
  The United States considers that measures of th e EC and the member States provide subsidies 
that are inconsistent with their obligations under the SCM Agreement and the GATT 1994, including: 
 
• The provision by the member States of financing for large civil aircraft design and 
development to the Airbus
1 companies (hereinafter "launch aid")2  This financing provides 
benefits to the recipient companies including financing for projects that would otherwise not be commercially feasible.  The non-commercial terms of the financing include no interest or interest at below-market rates and a conditi onal repayment obligation that is tied to the 
                                                     
 
1 The Airbus companies, as referenced throughout this request, include Airbus SAS, its predecessor 
Airbus GIE and current and predecessor affiliated companie s, including each person or  entity that directly, or 
indirectly through one or more intermediaries or relationships, controls or controlled, is or was controlled by, or 
is or was under common control with Airbus SAS or Airbus GIE, such as parent companies, sibling companies and subsidiaries, including Airbus Deutschland GmbH, Airbus España SL, Airbus France S.A.S., Airbus UK 
Limited, European Defence and Space Company ("EADS"), and BAE Systems. 
2 The EC and the member States use different terms to describe the type of financing at issue, such as 
launch aid, launch investment, avances remboursables, Rueckzahlbare Zuwendungen, Entwicklungsbeihilfen, 
Zuschuesse zur Entwicklung von zivilien Flugzeugen, an ticipo reembolsable, and prestamo reembolsable.  
Although the United States will hereinafter refer to the financing as "launch aid," the US request for consultations is with respect to all such types of financing, regardless of the specific term or terms that the entity 
providing the financing uses. WT/DS316/1 
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 success of the aircraft model being financed; if a model is not successful, some or all of the 
financing is forgiven. 
 
• The provision by the EC and the member St ates of grants and government-provided goods 
and services to develop, expand, and upgrade Ai rbus manufacturing sites for the development 
and production of the Airbus A380.  Specific instances include public investments in Airbus manufacturing facilities by German authorities in Hamburg and Nordenham, by French 
authorities in Toulouse, by UK authorities at Broughton, and at numerous locations in Spain 
by Spanish authorities (such as Puerto Real, Illescas, Puerto de Santa Maria, and La Rinconada). 
 
• The provision by the EC and the member St ates, through the European Investment Bank 
("EIB"), to the Airbus companies, including Airbus’ parent company EADS, of research and 
development and other loans on preferential te rms, including financing for the A320, the 
A321, the A330/340, and the A380. 
 
• The assumption and forgiveness by the EC a nd the member States of debt resulting from 
launch aid and other large civil aircraft productio n and development financing, including debt 
accumulated by Deutsche Airbus and forgiven by the German government and debt assumed 
by the government of Spain on behalf of  Construcciones Aeronauticas SA ("CASA"). 
 
• The provision by the EC and the member States of equity infusions and grants, including 
through government-owned and government-cont rolled banks.  Examples include equity 
investment by the German government through Kreditanstalt für Wiederaufbau ("KFW") in 
Deutsche Airbus and the return of the shares acquired through this transaction to Deutsche 
Airbus’  parent, the Daimler group, without co mpensation.  The French government between 
1987 and 1997 made equity infusions to off set losses of Aérospatiale and increased the 
company’s share value through share tr ansfers into the company in 1998. 
 
• The provision by the EC and the member Stat es of research and development loans and grants 
in support of large civil aircra ft development.  These loans and grants directly benefit the 
Airbus companies. 
 
• Any amendments, revisions, implementing or related measures to the measures described 
above. 
 
• Any other measures that involve a financial c ontribution by the EC or any of the member 
States that benefit the Airbus companies. 
  The subsidies in question include those relati ng to Airbus models A300, A310, A320 family, 
A330/340, A330-200, A340-500/600, and most recently the A380.  
 The United States is concerned that the launch aid provided by the EC and the member States 
to Airbus for the development of large civil ai rcraft, including but not limited to the Airbus 
A340-500/600 and the A380, and the EIB loan provide d to EADS for the A380, appear to be export 
subsidies in breach of Articles 3.1(a) and 3.2 of the SCM Agreement.   The United States further is concerned that th e measures appear to be causing adverse effects 
to its interests as provided in: 
  WT/DS316/1 
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 • Article 5(a) of the SCM Agreement because th e measures are specific subsidies within the 
meaning of Articles 1 and 2 of the SCM Agr eement and an evaluation of all relevant 
economic factors has shown that their effects are causing or threatening to cause injury to the 
US industry in the US market for large civil aircraft. 
 
• Articles 5(c), 6.3(a), 6.3(b), 6.3(c), and 6.4 of the SCM Agreement because the measures are 
specific subsidies within the meaning of Artic les 1 and 2 of the SCM Agreement that are 
causing or threatening to cause serious prejudice to the interests of the United States through 
displacement and impedance of US imports of large civil aircraft into the EC and third 
country markets, and through significant price undercutting, price suppression, price depression or lost sales in the same market. 
 
 The United States also is concerned that th e measures appear to be inconsistent with 
Article XVI:1 of the GATT 1994.   The United States also is concerned that th e measures have caused and continue to cause 
nullification or impairment of benefits accruing dir ectly or indirectly to the United States under the 
GATT 1994 within the meaning of Article XXIII:1.   Attached please find the statement of availabl e evidence, pursuant to Articles 4 and 7 of the 
SCM Agreement.  
 We look forward to receiving your reply to this request and to fixing a mutually acceptable 
date for consultations. WT/DS316/1 
G/L/697 G/SCM/D62/1 
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 Statement of Available Evidence
 
 
 
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