EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT
Document: Recourse to Article 21.5 of the DSU by the United States Request for Consultations
Date: 14 December 2011
Document codes: WT/DS316/19
Complainant: U.S.
Respondent: EU, France, Germany, Spain, United Kingdom
Third parties: Australia, Brazil, Canada, China, Japan, South Korea
Dispute stage: Retaliation & Arbitration
Agreements cited: Art. 3.1, 3.2, 5, 6.3  Subsidies and Countervailing Measures (SCM)Art. XVI:1  GATT 1994Art. 1, 2  Subsidies and Countervailing Measures (SCM)Art. III:4  GATT 1994

EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES –
MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT

Recourse to Article 21.5 of the DSU by the United States

Request for Consultations

 The following communication, dated 9 December 2011, from the delegation of the
United States to the delegation of the Europ ean Union, France, Germany, Spain and the
United Kingdom and to the Chairperson of the Disput e Settlement Body, is circ ulated in accordance
with Article 21.5 of the DSU.

 My authorities have instructed me to request consultations with the European Union ("EU")
and with the Governments of France, Germany, Spain, and the United Kingdom ("certain member
States") pursuant to Article 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, and Articles 4, 7 and 30 of the Agreement on Subsidies and Countervailing Measures ("SCM
Agreement"), to the extent that Article 30 inco rporates Article XXIII of the GATT 1994, with regard
to measures affecting trade in large civil aircraft. The United States considers that such consultations
will be useful in the current situation and makes this request without prejudice to its view that
consultations are not required under Article 21.5 of the DSU.
 For more than 40 years, the EU and certain member States have provided subsidies for the
development and production of large civil aircraft. While there is disagreement on the precise amount
of total subsidization, there is no dispute that it runs to billions of dollars.
 On June 1, 2011, the WTO Dispute Settlement Body ("DSB") adopted its recommendations
and rulings in the dispute European Communities and Certain Memb er States – Measures Affecting
Trade in Large Civil Aircraft (" EC – Large Civil Aircraft ")
1 and found that the EU and certain
member States provided subsidies for the development and production of large civil aircraft that are
inconsistent with their obligations under the SC M Agreement. Moreover, the DSB found that under
the most likely scenarios, Airbus, the EU large civ il aircraft producer, would not have existed without
the subsidies, and there would be no Airbus aircraft on the market.
Specifically, the DSB ruled that the following are sp ecific subsidies within the meaning of Articles 1
and 2 of the SCM Agreement that caused adverse e ffects to US interests within the meaning of
Articles 5(c) and 6.3(a), (b), and (c) of that Agreement:

1 Dispute Settlement Body, Minutes of 1 June 2011, Meeting, WT/DSB/M/237, para. 28.

 each grant of launch aid/member State financing ("LA/MSF") to Airbus prior to
2006;
 the provision of the Mühlenberger Loch site and the lengthened Bremen Airport
Runway;
 grants by authorities in Germany and Spain for the construction of manufacturing and
assembly facilities in Nordenham Germany and Sevilla, La Rinconada, Toledo,
Puerto de Santa Maria and Puerto Real, Span, and by the government of Andalusia
and Castilla-La Mancha to Airbus in Puerto Real, Sevilla, and Illescas (Toledo);
 the 1989 acquisition by Kreditanstalt für Wiederaufbau ("KfW") of a 20 percent
equity interest in Deutsche Airbus and the 1992 transfer by KfW of its 100 percent
equity interest in Deutsche Airbus to Messerschmitt-Bölkow-Blohm GmbH
("MBB"); and
 the 1987, 1988, 1992, and 1994 equity infusions to Aérospatiale.
The DSB recommended that the Euro pean Union and certain member States granting each of these
subsidies take appropriate steps to remove the adverse effects or withdraw the subsidy.
2 Under
Article 7.9 of the SCM Agreement, the EU and certain member States had six months from
1 June 2011, to take such steps or withdraw the subsidy.
 On 1 December 2011, the EU transmitted a document ("EU Notification") to the
United States purporting to explain how the EU ha s complied with the recommendations and rulings
of the DSB.3 The United States has carefully reviewed the notification and considers that the actions
and instances of inaction set out therein failed to withdraw the subsidies or remove their adverse
effects. In addition, US review of the EU No tification indicates that the EU and certain member
States are providing subsidies with respect to the production and development of large civil aircraft
that are inconsistent with the SCM Agreement. In particular, the following subsidies are being
accorded by the EU and certain member States:
 forgiveness of outstanding obligations to the Governments of France, Germany,
Spain, and the United Kingdom under LA/MSF agreements for the A300B,
A300B2/B4, A300-600, A310, A310-300, A320, A330/A340 Basic, A330-200, and
A340-500/600;
 termination of French, German, Spanish, and UK LA/MSF agreements for the
A300B, A300B2/B4, A300-600, A310, A310-300, A320, A330/A340 Basic, A330-
200, and A340-500/600 on non-commercial terms or in a manner that did not
withdraw the subsidy;
 French, German, Spanish, and UK LA/MSF agreements for the A380;
 French, German, Spanish, and UK LA/MSF for double-aisle large civil aircraft,
including the A350XWB;
 the 1987, 1988, 1992, and 1994 French capital contributions into Aérospatiale;

2 Ibid; EC – Large Civil Aircraft , WT/DS316/R, para. 8.7, as modified by EC – Large Civil Aircraft,

3 Communication from the European Union, EC –Large Civil Aircraft, WT/DS316/17.

 KfW’s 1989 capital contribution into Deutsche Airbus GmbH and the 1992 transfer
by KfW of its 100 percent equity interest in Deutsche Airbus to MBB;
 Spanish regional development grants to the EADS/CASA facilities at La
Rinconada/San Pablo, Tablada, and Puerto de Santa Maria, Spain, and the Airbus
España, S.L. facilities in Illescas and Puerto Real;
 German regional development grant for an A380-related facility of Airbus
Deutschland GmbH in Nordenham, Germany;
 use of the runway extensions at Bremen Airport under the amended taking off and
landing fee schedule;
 use by Airbus of the Mühlenberger Loch industrial site subject to the amended lease
agreement between Airbus Deutschland GmbH and Projektierungsgesellschaft
Finkenwerder mbH & Co. KG;
 subsequent share transactions and cash transactions and cash extractions involving
subsidy recipients;
 subsequent investments in Airbus A320 and A330 large civil aircraft programs; and
 any amendments, revisions, implementing or related measures to the subsidies
described above.
 The United States considers that the actions a nd events listed in the EU Notification do not
withdraw the subsidies or remove their adverse effects for purposes of Article 7.8 of the SCM
Agreement and that the EU has therefore faile d to implement the DSB’s recommendations and
rulings. The United States further considers that th e EU subsidies listed above are inconsistent with
Articles 3.1(a), 3.1(b), 5(c), 6.3(a), 6.3(b), and 6.3(c) of the SCM Agreement.
 In light of the particular circumstances of this dispute, the United States considers that
consultations could facilitate subsequent steps to resolve this dispute. Although the United States
considers that consultations are not mandatory for recourse to exped ited panel procedures under
Article 21.5, they are also not precluded. Should th e EU consider that information relevant to these
consultations requires protection from release, the Unite d States is prepared to agree to application of
procedures for the protection of business confidential information similar to those applied by the
original panel in this dispute.
 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.