EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT
Document: Request for the Establishment of a Panel by the United States
Date: 11 April 2006
Document codes: WT/DS316/6; WT/DS316/1
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

Request for the Establishment of a Panel by the United States

 The following communication, dated 10 April 2006, from the delegation of the United States
to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 The United States refers to the 6 October 2004, request by the United States for consultations
with the Governments of Germany, France, the United Kingdom, and Spain (the "member States"),
and with the European Communities ("EC") (), the consultations held on
4 November 2004, and the US request for the establishment of a panel dated 31 May 2005
(). The United States refers also to the request by the United States for additional
consultations with the EC and the member States () and the consultations that the
United States held with the EC and the member States pursuant to that request on 23 March 2006.
These consultations unfortunately did not resolve the dispute.

 Accordingly, the United States respectfully re quests the Dispute Settlement Body to establish
a panel pursuant to Article 6 of the DSU, Article XXIII:2 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").

 The measures of the EC and the member States that are the subject of this panel request
include:

(1) The provision by the member States of financing for large civil aircraft design and
development to the Airbus companies
1 ("launch aid"). 2 This financing provides benefits to

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 Aeronautic 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, repayable launch investment, development support in the form of royalty-based
financing, avances remboursables, Rückzahlbare Zu wendungen, Entwicklungsbeihilfen, Zuschüsse zur
Entwicklung von zivilen Flugzeugen, anticipo reembolsable, and prestamo reembolsable. Although the United
States will hereinafter refer to the financing as "launch aid, " the U.S. request is with respect to all such types of
financing, regardless of the specific term or terms that the entities providing or receiving the financing use.

the recipient companies including financing for projects that would otherwise not be
commercially feasible. The non-commercial terms of the financing may include no interest or
interest at below-market rates and a repayment obligation that is tied to sales. If the aircraft is
not successful, some or all of the financing need not be repaid. Specific examples of the
financing at issue include:

 (a) French financing for the Airbus A300, A310, A320, A330/340, A330-200,
A340-500/600, A380, and A350;

 (b) German financing for the Airbus A 300, A310, A320, A330/340, A380, and A350;

 (c) United Kingdom financing for the Airbus A300, A310, A320, A330/340,
A340-500/600, A380, and A350; and

 (d) Spanish financing for the Airbus A300, A310, A320, A330/340, A340-500/600,
A380, and A350.

(2) In addition to launch aid, the provision by the EC and the member States, through the
European Investment Bank ("EIB"), to the Air bus companies, of financing for large civil
aircraft design, development, and other purposes. Specific examples of the financing at issue
include:
3

 (a) Financing to British Aerosp ace for the A320 and the A330/A340;

 (b) Financing to Aérospatiale, Aérosp atiale Gramont and Aérospatiale Super
Transporteurs for the A300 and the A330/340;

 (c) Financing to Construcciones Aerona uticas SA ("CASA") for the A320 and the
A330/340;

 (d) Financing to Airbus Industrie for the A321; and

 (e) Financing to EADS for the A380.

(3) The provision by the EC and the member States of financial contributions in connection with
the construction, creation, development, expans ion, upgrade, and use of facilities and other
infrastructure for or by the Airbus companies. Specific instances include:

 (a) the expenditure of at least €751 milli on by the Hamburg government since 2000 to
create and develop land, installations, and facilities for the expansion of the Airbus
companies' production and assembly site in Hamburg-Finkenwerder, and the
provision of this land, installations, and facilities to the Airbus companies for less
than adequate remuneration;

 (b) the expenditure of at least €6 million by the government of Niedersachsen in 2002 for
the Airbus companies' factory in Nordenham;

 (c) the expenditure of at least DM40 milli on by the government of Bremen to extend a
runway at Bremen airport for use by the Airbus companies and the provision of the

3 EIB financing to airline customers for the purchase of new aircraft is not within the scope of this
panel request.

extended runway to the Airbus companies for use for cargo and passenger flights for
less than adequate remuneration;

 (d) the expenditure of at least €182 million by the French central government and/or
regional, departmental and/or local authorities and bodies (including, but not limited
to the Region Midi-Pyrenées , the Departement de la Haute Garonne , the
Communauté de l'Agglomération de Grande Toulouse , SETOMIP and others) to
create and develop the AeroConstellation site adjacent to the Toulouse airport,
including investment in access roads, taxiwa ys and other specific infrastructure, the
provision of land on this site to the Airbus companies fo r their exclusive use for less
than adequate remuneration, and the granting to the Airbus companies of access to,
and use of, infrastructure on this site, or linking this site to public infrastructure, for
less than adequate remuneration;

 (e) the financial contributions made by the Spanish central government as well as by
Spanish regional authorities to the Airbus companies, including, but not limited to the
following:

(i) the 2001 contribution by the Spanish Government of € 2.2 million to EADS,
CASA and/or Airbus España for its site at Sevilla and of € 814,000 to EADS,
CASA and/or Airbus España for its site at La Rinconada, Sevilla;

(ii) the 2001 contribution by the Andalusian Government of €8.6 million to
EADS, CASA and/or Airbus España for its production and maintenance
facility in El Puerto de Santa Maria, in Cadiz, in Spain;

(iii) the 2002 contribution by the Andalu sian Government of € 9.3 million to
EADS, CASA and/or Airbus España for its facilities at Tablada, Sevilla;

(iv) the 2002 contribution by the Andalu sian Government of € 35.7 million to
EADS, CASA and/or Airbus España for its site in Sevilla;

(v) the 2003 contribution by the Spanis h Government of €37.9 million to EADS,
CASA and/or Airbus España for its site in Illescas, in Toledo, Spain;

(vi) the 2003 contribution by the Spanish Government of €43 million to EADS,
CASA and/or Airbus España for its site in La Rinconada in Spain;

(vii) the 2003 contribution by the Spanish Government of €5.9 million to EADS,
CASA and/or Airbus España for its site in Puerto de Santa Maria in Spain;

(viii) the 2003 contribution by the Spanis h Government of €13.1 million to EADS,
CASA and/or Airbus España for its site in Puerto Real in Spain;

(ix) the 2003 contribution by the Andalu sian Government of €17.5 million to
EADS, CASA and/or Airbus España for its production and maintenance
facility in Puerto Real, in Cadiz, in Spain;

(x) the 2004 contribution by the Castilla-L a Mancha government of € 7.6 million
to EADS, CASA and/or Airbus España for its production site in Illescas, in
Toledo;

(xi) the 2004 contribution by the Andalusian Government of €61.9 million for an
investment project by EADS, CASA and/or Airbus España in the
municipalities of Sevilla and La Rinconada, Sevilla;

(xii) the 2004 contribution by the Andalusian Government of a further €35.7
million for an investment project by EADS, CASA and/or Airbus España in
the municipalities of Sevilla and La Rinconada, Sevilla; and

(xiii) the 2005 contribution or contribu tions of at least €22 million and the
provision of land by the Spanish gove rnment and/or the regional government
of Andalusia to EADS, CASA and/or Ai rbus España in connection with its
site at or near the Sevillian airport of San Pablo;

 (f) the 2002 grant by the Welsh Assembly of £19.5 million for the Airbus companies'
Broughton site;

 (g) the 2006 grant by the Welsh Assembly of £5.2 million for the Airbus companies'
Broughton site;

 (h) the £230 million "on-site investment" by UK government authorities for the Airbus
companies' Broughton site; and

 (i) the £5 million contribution by UK authorities (including the Department of Trade and
Industry and the South West Development Agency) for the Airbus Composites Centre
at Airbus UK Filton.

(4) The assumption and/or repayment by the EC and the member States of debt and/or losses
incurred by the Airbus companies and the forg iveness of debt by the EC and the member
States, including:

 (a) The assumption and/or repayment of the Airbus companies' debt by the German
government between 1975 and 1982;

 (b) The assumption and/or repayment of the Airbus companies' debt by the German
government between 1987 and 1995 as part of the "Altlastenhilfe" agreed in 1987
4
and as part of the 1989 aid package for Messerschmitt-Bölkow-Blohm and Deutsche
Airbus in the context of the transfer of these companies to Daimler-Benz AG;
5

 (c) The assumption by the government of Spain of CASA's Airbus-related losses from
1971 through 1989, and the deferral and forg iveness by the government of Spain of
the resulting CASA debt;6

4 German Economics Ministry, Press Re lease, November 1988, reprinted in Handelsblatt, "Erklärung
des Bundesministeriums für Wirtschaft zur Neustrukturierung der Luftfahrtindustrie," November 3, 1988, p. 24 ;
German Monopolkommission, Sondergutachten 18, Zusammenschlussvorhaben der Daimler-Benz AG mit der
Messerschmitt-Bölkow-Blohm GmbH, 1989, p. 72, para. 121; German Bundestag, BT-Drs. 13/8409, p. 14;
German Bundestag, BT-Drs. 11/4375, pp. 18-19.
5 German Monopolkommission, Sondergutachten 18 , Zusammenschlussvorhaben der Daimler-Benz
AG mit der Messerschmitt-Bölkow-Blohm GmbH, 1989, p. 75, para. 131; Daimler-Benz AG, 1994 Annual
Report, p. 84; Daimler-Benz AG, 1995 Annual Report, p. 66.
6 See Boletín Oficial de las Cortes Genrales, Secci on Cortes Generales, April 30, 2001, Serie A
Núm. 139, pp. 98, 99.

 (d) The 1997/98 forgiveness by the German gove rnment of debt relating to launch aid for
the A320; and

 (e) The 1998/99 forgiveness by the German gove rnment of debt relating to launch aid for
the A300, A310, A330 and A340 and othe r government financing for large civil
aircraft development and production (i ncluding German government loans and
German Besserungsscheine (profit-sharing obligations) accumulated by Deutsche
Airbus);

(5) The provision by the EC and the member St ates of equity infusions and grants, including
through government-owned and/or government -controlled banks, to the Airbus companies,
including:

 (a) The equity investment made by th e German government through Kreditanstalt für
Wiederaufbau ("KFW") in Deutsche Airbus between 1989 and 1992;

 (b) The return of the shares acquired throug h the transaction listed in subparagraph (a) to
Deutsche Airbus' parent, the Daimler group, without compensation, in 1992;

 (c) The equity infusions by the French gov ernment into Aérospatiale in 1987/1988 and
1988;

 (d) The equity infusion by or through French government-owned Crédit Lyonnais into
Aérospatiale in 1992;

 (e) The equity infusion by the French government into Aérospatiale in 1993/1994; and

 (f) The transfer by the French Governme nt of its 45.76 percent share of Dassault
Aviation's capital to Aérospatiale in 1998.

(6) The provision by the EC and the member States of financial contributions for aeronautics-
related research, development, and demonstr ation/evaluation ("R&D"), undertaken by the
Airbus companies, whether alone or with others , or in any other way to the benefit of the
Airbus companies, including:

 (a) EC funding for civil aeronautics-rela ted R&D projects under the Second (1987-1991),
Third (1990-1994), Fourth (1994-1998), Fifth (1998-2002) and Sixth (2002-2006) EC
Framework Programs in which the Airbus companies participated.

 (b) Funding from the German federal gover nment and from German sub-federal entities
for civil aeronautics-related R&D proj ects in which the Airbus companies
participated, including:

(i) federal government funding as set forth in the most updated version of the
government's Förderkatalog database, since 1990,
7 including funding under
the federal aeronautics research programs
 Luftfahrtforschungsprogramm 1 (1995-1998),
 Luftfahrtforschungsprogramm 2 (1998-2002), and
 Luftfahrtforschungsprogramm 3 (2003-2007);

7 Available at http://www.foerderkatalog.de.

(ii) funding by the German land Bremen under the Airbus Materials & System
Technology Centre Bremen (AMST) ( 2000-2002) and the Airbus Materials
& System Technology Centre Bremen II (AMST II) (2002-2006) programs;

(iii) funding by the German land Bavaria from the budgets of the Bayerische
Staatsministerium für Wirtschaft, Verkehr und Technologie (and any
predecessor or successor Ministries) (including the budget items " Zuschüsse
und sonstige Ausgaben zur Förder ung neuer Technologien und ihrer
wirtschaftlichen Verwertung " and " Zuschüsse und sonstige Ausgaben zur
Förderung von Luft- und Raumfahrttechnologien "), as well as funding from
the "Offensive Zukunft Bayern", "Offensive Zukunft Bayern II" and "Hightech
Offensive Bayern" budgets; and

(iv) funding by the German land Hamburg under its
Luftfahrtforschungsprogramm (2000-2005).

 (c) Funding from the government of the United Kingdom since 1990 for civil
aeronautics-related R&D projects in whic h the Airbus companies participated,
including

(i) under the Civil Aircraft Research a nd Development Program ("CARAD") as
well as any predecessor and successor program thereof, including the
Aeronautics Research Programme (ARP);

(ii) under the Technology & Strategy Program;

(iii) through the Engineering and Physi cal Sciences Research Council ("EPSRC");
and

(iv) through the Department of Trade and Industry ("DTI") and the Regional
Development Agencies ("RDAs"), such as the South West Development
Agency ("SWRDA"), to R&D initiatives involving the Airbus companies,
such as the National Composite Network, including the Composite Structures
Development Centre based at Airbus UK, Filton.

 (d) Funding from the Spanish government, including regional and local authorities, since
1993 for civil aeronautics-related R&D projects in which the Airbus companies
participated, including loans and other financial support provided under:

(i) the Plan I+D para el Sector Aeronautico (Plan Tecnológico Aeronáutico I )
(1993-1998) and the Plan Tecnológico Aeronáutico II (1999-2003); and

(ii) the Programa de Fomento de Innovación Técnica ("PROFIT"), including the
Programa Nacional de Aeronáutica of PROFIT 2000-2003 and the
Subprograma Nacional de Transporte Aéro of PROFIT 2004-2007.

 (e) Funding from the French central government since 1990 for civil aeronautics-related
R&D projects in which the Airbus compan ies participated, including R&D funding
from the Transport Ministry ( Ministère de l'Équipement, des Transports et du
Logement) and the Defense Ministry ( Ministère de la Défense). Some of the relevant
R&D funding is recorded as " recherche amont " in the annual French budgets and
described, e.g., in the annual reports prepared by the French Sénat concerning the air

transport budget. 8 Funding may also have come from other French central
government budgets. Examples of relevant R&D projects supported by the French
central government include:

(i) Aérothermique Transitoire ("ATRAN");

(ii) Commandes de l'Avion Souple ("COVAS");

(iii) Aircraft anti-icing and de-icing project ("ECLIPPS");

(iv) Modélisation et Simulation de l'Avion Souple ("MOSAS"); and

(v) Aircraft vibration/static testing ("DTP Tremblement").

 (f) The provision by the EC and member State governments of preferential, early and/or
exclusive access to results of government-funded research (such as data, trade secrets,
intellectual property rights or any other form of research results), including pursuant
to the EC's rules concerning the par ticipation in, and the dissemination and
exploitation of, research results and/or knowledge from projects and programs funded
under the EC Framework Programs listed in subparagraph (a) above and pursuant to
the rules governing the access to the results of research funded by the member States
under any of the programs listed in subparagraphs (b) through (e) above.

 (g) The provision by research institutions controlled and/or financed by member State
governments (including, in particular, ONERA, DLR and DERA/Qinetiq) of civil
aeronautics R&D-related financial contributions to the Airbus companies since 1990,
including by providing civil aeronautics R& D services to the Airbus companies for
less than adequate remuneration; by making payments to the Airbus companies; by
providing the results of civil aeronautics-re lated R&D to the Airbus companies for

8 Cf. Sénat, No. 367 (session ordinaire de 1996-1997), Rapport d'Information "Mission de contrôle
finances pour 1999 (n° 1078), Tome XIII, Équipement, Transports et Logement, Transports Aériens, p. 15;
Sénat, No. 89 (session ordinaire de 1999-2000), Rap port Général, Commission des Finances, du Contrôle
Annexe No. 25, Équipment, Transport et Logement: III. - Transports: Transport Aérien et Météorologie et
Aviation Civile, p. 88; Sénat, No. 92 (session ordinaire de 2000-2001), Rapport Général, Commission des
2001, Tome III, Annexe No. 24, Équipment, Transport et Logement: III. - Transports: Transport Aérien et
Météorologie et Aviation Civile, p. 79; Sénat, No. 87 (session ordinaire de 2001-2002), Rapport Général,
de finances pour 2002, Tome III, Annexe No. 24 Équipement, Transport et Logement: III. - Transports et
Sécurité Routière: Aviation et Aéronautique Civiles, p. 22; Sénat, No. 68 (session ordinaire de 2002-2003),
Tourisme et Mer: III. - Transports et Sécurité Routière: Aviation et Aéronautique Civiles, p. 50; Sénat, No. 73
Équipement, Transport et Logement: III. - Transports et S écurité Routière: Aviation et Aéronautique Civiles, p.
40; Sénat, No. 74 (session ordinaire de 2004-2005), Rapport Général, Commission des Finances, du Contrôle
Annexe No. 17 Équipement, Transport, Aménagement du Territoire, Tourisme et Mer: II. - Transports et
Sécurité Routière: Aviation et Aéronautique Civiles, p. 50.

less than adequate remuneration; by allo wing the Airbus companies to exploit the
results of civil aeronautics-related R&D unde rtaken by such research institutions
(including the granting of exclusive or early access to data, trade secrets and other
knowledge resulting from such R&D); and by allowing the Airbus companies to
participate in civil aeronautics-related R&D projects undertaken by such institutions.

 The following are examples of projects in which such civil aeronautics R&D-related
financial contributions have been made by research institutions controlled and/or
financed by member State governments to the Airbus companies:

(i) The Deutsches Zentrum für Luft- und Raumfahrt ("DLR") has provided civil
aeronautics R&D-related financial cont ributions through R&D projects in
numerous research areas, including:

– advanced materials and manufacturing technologies, including the
development of fibre reinforced lightweight fuselage structures, the
development of advanced materi als and manufacturing technologies
for vertical and horizontal tails for the Airbus companies' aircraft, the
development of a full-scale A 320 carbon fibre composite fuselage
(the "Schwarzer Rumpf" / "Black Fuselage" program), the
development of adaptive wings for the A380 manufactured from
composite materials, the devel opment of hybrid-laminarization
technologies, the development of di fferential-pressure resin-transfer
moulding technologies for the A380 and other Airbus aircraft, the
development and testing of riblet surfaces, and other projects;

– aerodynamics and acoustics technol ogies, including the development
of a quiet slat for the Airbus companies, the development of winglets
for the A380, the use of vortex generators to reduce noise, the
reduction of the A380's wake vortices, the development of slat and
flap track configurations for the A380 to reduce highlift-related
noise, the improvement of cabin acoustics, and other projects;

– aircraft development and testing technologies, including the
development of aerodynamic simulation and optimization processes
(e.g., the DLR R&D projects MEGAFLOW and MEGADESIGN),
the improvement of the Airbus companies' design tool "ISSY", the
design and valuation of a virtual test station for the Airbus
companies, the development a nd improvement of numerical
simulation for aerodynamic flaps, the construction of a static
vibration test station for the A340-500/600 and the A380, and other
projects; and

– other technologies, including, for example, the development of
certain control units within the "Flexible Aircraft" program, the
development of enhanced vision systems, the development and
improvement of autopilot technologies, and other projects.

(ii) The UK Defence Evaluation and Research Agency ("DERA") and its
successor Qinetiq have provided civil aeronautics R&D-related financial
contributions through R&D projects in numerous research areas, including:

– advanced materials, including thro ugh DERA's Structural Materials
Centre,9 including in the fields of carbon-fiber composite airframe
structures ( e.g., the "Civil Aircraft Structural Composites -
Application, Development and Exploitation" (CASCADE) project),
manufacturing methods for advanced aircraft materials
10 ( e.g.,
through structural optimisation and structural hardening
techniques),11 lightweight titanium metal-matrix composite
technology,12 and other wing-related materials technology 13 ( e.g.,
metal/composite interface joints, aluminium/lithium laminates,
welded structures, and fibre reinforced laminates of new large
wings);
14

– aerodynamics;
15

– cabin design, semiotics and seat comfort;
16

– fuel systems; 17 and

– modular avionics design.
18

(iii) The Office National des Études et des Recherches Aérospatiales ("ONERA")
has provided civil aeronautics R&D-related financial contributions through
numerous R&D projects, including:

– Modélisation Aérothermique des Ecoulements en Ventilation Avion
("MAEVA");

– Robust Efficient Automatic Control Laws Design ("REAL");

– DTP Pilotage ;

and

des avions).

9 DTI Press Release, "Partnership to Revolutionise Aircraft Manufacture," 8 September 1998, available
at http://www.gnn.gov.uk/environment/detail.asp? ReleaseID=19917&NewsAreaID=2&NavigatedFrom
Department=False (attachment 63).
10 DTI Press Release, "Partnership to Revolutionise Aircraft Manufacture," 8 September 1998,
available at http://www.gnn.gov.uk/environment/det ail.asp?ReleaseID=19917&NewsAreaID=2&Navigated
FromDepartment=False.
11 QinetiQ website, Case studies aviation, Airbus - The World's Largest Airliner.
12 DTI, Aerospace & Defence Technology Report 2001/2002, p. 6.
13 Qinetiq, Press Release, "DTI fundi ng lifts Qinetiq's standing as aerospace world leader in field of
polymeric composites," August 19, 2002, available at the QinetiQ website.
14 QinetiQ website, Case studies aviation, Airbus - The World's Largest Airliner.
15 DTI Aerospace & Defence Technology Report 2001/2002, p. 4; QinetiQ website, Case studies
aviation, Airbus - The World's Largest Airliner.
16 QinetiQ website, Case studies aviation, Airbus - The World's Largest Airliner.
17 QinetiQ website, Case studies aviation, Airbus - The World's Largest Airliner.
18 QinetiQ website, Case studies aviation, Airbus - The World's Largest Airliner.

(iv) The Centre National de la Recherche Scientifique ("CNRS"), at several of its
locations, has provided civil aeronautics R&D-related financial contributions
through numerous R&D projects, including:

– Validation of the movement-control software guiding the
transportation of the A380 parts, at Laboratoire d'analyse et
d'architecture des systèmes, Toulouse ("LAAS");

– Software development for the A380 flight controls, at laboratoire
Verimag at Gières/Grenoble;

– Development of the statics analyzation tool "Astree" at École
Normale Supérieure at Liens; and

– Research on the wake vortex of the A380 at Institut de recherche sur

(v) The Centre National de la Recherche Technologique ("CNRT") has provided
civil aeronautics R&D-related financ ial contributions through numerous
R&D projects, including:

Structuraux en conditions sévères de fonctionnement
("APROSUTIS"); and

("MUSIC").

(vi) The Institut National de Recherche en Informatique et en Automatique
("INRIA") at several of it s research units, including the units Futurs, Rhône
Alpes and Sophia Antipolis, has provi ded civil aeronautics R&D-related
financial contributions to the Airbus companies through numerous R&D
projects, including:

– Environnement de spécification de programmes réactifs synchrones
("ESPRESSO");

– Methods, algorithms and soft ware in automatic control
("METALAU"); and

– Constraints solving, Optimization Robust Interval Analysis
("COPRIN").

(vii) The Commissariat à l'Energie Atomique ("CEA") has provided civil
aeronautics R&D-related fi nancial contributions th rough numerous software
development projects, including:

– CAVEAT;

– GATel; and

– Panorama.

 (h) The granting to the Airbus compani es of access to R&D facilities funded or
co-funded and/or owned, in whole or in part, by the UK, French, German and/or
Spanish governments (including research in stitutions controlled and/or financed by
member State governments such as, in pa rticular, ONERA, DLR and DERA/Qinetiq)
for less than adequate remuneration, including, e.g., the provision, by the German,
French, and UK governments, of access by the Airbus companies to the wind tunnels
operated by ONERA, DLR and DERA/Qinetiq (w hether alone or jointly with others),
including the wind tunnels owned and/or operated by European Transonic
Windtunnel GmbH ("ETW") and by the DNW Foundation, for less than adequate
remuneration.

(7) Any amendments, revisions, implementing or related measures to the measures described
above.

(8) Any other measures that involve a financial contribution by the EC or any of the member
States that benefit the Airbus companies.

 The United States is concerned that the launch aid provided by the EC and the member States
to the Airbus companies for the development of larg e civil aircraft and the EIB loans provided to the
Airbus companies appear to be subsidies that ar e inconsistent with Articles 3.1(a) and (b) and
Article 3.2 of the SCM Agreement.

 The United States further is concerned that the measures of the EC and the member States
that are the subject of this request appear to be causing adverse effects to US interests within the
meaning of:

• Article 5(a) of the SCM Agreement b ecause the measures are specific subsidies
within the meaning of Articles 1 and 2 of the SCM Agreement that are causing or
threatening to cause injury to the US large civil aircraft industry.

• Articles 5(c), 6.3(a), 6.3(b), and 6.3(c) of the SCM Agreement because the measures
are specific subsidies within the meaning of Articles 1 and 2 of the SCM Agreement
that are causing or threatening to cause seri ous prejudice to the interests of the United
States through displacement and impedance of imports of large civil aircraft of the
United States into the EC and third count ry markets, and through significant price
undercutting by large civil aircraft of the EC as compared with the price of large civil
aircraft of the United States in the same markets, and significant price suppression,
price depression or lost sales in the same markets.

 The United States also is concerned that th e measures appear to be inconsistent with
Articles III:4 and XVI:1 of the GATT 1994.