EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT
Document: Communication from the European Union 
Date: 5 December 2011
Document codes: WT/DS316/17
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

Communication from the European Union


 The following communication, dated 1 December 2011, from the delegation of the
European Union to the Chairperson of the Dispute Settlement Body, is circulated at the request of that
delegation.

Settlement Body (DSB) with respect to the dispute (WT/DS316). The European Union would
like to inform the DSB that it has taken appropriate steps to bring its measures fully into conformity
with its WTO obligations, and to comply with the DSB's recommendations and rulings.
2. In considering appropriate steps to bring its measures into conformity with its WTO
obligations, the European Union took note of all elements of the DSB's recommendations and rulings,
including, in particular, the Appellate Body's gui dance on the way in which subsidies and adverse
effects expire, dissipate, terminate or are otherwis e removed or withdrawn. In undertaking this
review, we consulted, among others, independent experts in: financial economics; investor behaviour;
financial and cost auditing, accoun ting and controlling; product engin eering; and Large Civil Aircraft
(LCA) fleet management. We have also clo sely monitored and assessed LCA product and market
developments in the months and years following the period covered by the Panel's review.
3. As a result of this review, the European Uni on has adopted a course of action that addresses
all forms of adverse effects, all categories of subsid ies, and all models of Ai rbus aircraft covered by
the DSB's recommendations and rulings.
4. Specifically, in bringing its measures into conformity with its WTO obligations, the European
Union has addressed all categories of subsidy cove red by the DSB's recommendations and rulings:
Member State Financing (MSF) loans, capital contri butions, infrastructure support and regional aid.
Amongst others, the European Union has secured repayment of MSF loans and terminated MSF
agreements, increased fees and lease payments on infrastructure support to accord with market
principles, and ensured that capital contributions and regional aid subsidies have, in the Appellate
Body's words, "come to an end" and are no longer capable of causing adverse effects. Additionally,
the course of action adopted by the European Uni on affects Airbus' A300, A310, A320, A330, A340
and A380 aircraft, as well as derivatives thereof, as implicated by the DSB's recommendations and
rulings. Finally, as a result of these steps and othe r intervening market even ts, the European Union

 Formerly the EC.

has addressed the forms of adverse effects covere d by the DSB's rulings. Information concerning the
steps that have been taken by the European Union is provided in the attached list.
5. In short, by having taken appropriate steps to bring our measures into conformity with our
WTO obligations, as required by Article 7.8 of the SCM Agreement and Article 19.1 of the DSU, the
European Union has ensured full implementation of the DSB's recommendations and rulings.

Aérospatiale; the 1989 capital contribution by Kred itanstalt für Wiederaufbau ("KfW") into Deutsche
Airbus GmbH and the subsequent 1992 transfer of KfW's shares; the French MSF agreements for the
A300B, A300B2/B4, A300-600, A310, A310-300, A320, A330/A340 Basic, A330-200 and A340-
500/600; the German MSF agreements for the A300B, A300B2/B4, A300-600, A310, A310-300,
A320 and A330/A340; the Spanish MSF agreements for the A300B, A300B2/B4, A300-600, A310,
A310-300, A320, A330/A340 Basic and A340-500/ 600; the UK MSF agreements for the A320 and
A330/A340 Basic; the regional development grant fo r an A380-related facility of Airbus Deutschland
GmbH (now Premium AEROTEC GmbH) in Nordenham, Germany; and, the regional development
grants for largely A380-related facilities of EADS /CASA in Tablada and Puerto de Santa Maria,
Spain, and of Airbus España, S.L. (now Airbus Operations, S.L.) in Illescas and Puerto Real, Spain;
27. Isolation of Spanish regional development grants to the EADS/CASA facility at La
Rinconada/San Pablo, Spain, from use for LCA purposes;
28. Amendment of take-off and landing fee schedule fo r use of the runway extensions at Bremen
Airport;
29. Amendment of the lease agreement between Airbus Deutschland GmbH and
Projektierungsgesellschaft Finkenwerder mbH & Co . KG for an A380-related Airbus Deutschland
GmbH facility in Hamburg Finkenwerder;
30. Subsequent share transactions and cash extractions involving subsidy recipients;
31. Termination of the A300 LCA programme;
32. Termination of the A310 LCA programme;
33. Termination of the A340 LCA programme;
34. Completed deliveries of relevant LCA to ma rkets for which displacement was found and
completed performance of sales contracts for A319s with easyJet, A320s with Air Berlin, A319s and
A320s with Czech Airlines, A320s with Air Asia, A340-600s with Iberia, A340-300s and A340-600s
with South African Airways, A340-500s and A340-600s with Thai Airways International, A380s with
Emirates Airlines, A380s with Singapore Airlines, and A380s with Qantas;
35. Non-subsidised subsequent investments in Airbus' A320 and A330 LCA programmes;
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36. Attenuation, through the actions or steps take n with respect to the subsidies and through
further intervening causes, of any causal link to th e point that it no longer constitutes "'a genuine and
substantial relationship of cause and effect' be tween the subsidies and the alleged market
phenomenon".3