Saturday, September 5, 2009

Havel on WTO Airbus Ruling

Prof. Brian Havel's thoughts on the freshly issued WTO report concerning State subsidies received by European aircraft manufacturer Airbus was featured in a Dow Jones Newswire story yesterday.  See Ann Keeton, Boeing Bests Airbus in Interim WTO Ruling, Dow Jones Newswire, Sept. 4, 2009 (available here).

From the story:

The decision Friday "is a big win on paper, but the reality is, the process of appeals is likely to go on until 2013," said Brian Havel, Director of International Aviation law at DePaul University's college of law.

In the meantime, Boeing and Airbus will carry on with business as usual. With government help, both companies plan to introduce new aircraft, the 787 for Boeing and Airbus' A350.

Havel said that, given the politics surrounding world trade, it's quite likely that the WTO's next ruling will go in favor of Airbus, more or less leveling the playing field.

WTO rulings potentially could help set a global framework for government funding of new aircraft. But, Havel said, international judicial rulings tend to be "squishy" and more open to interpretation than opinions handed down by a high court in the the U.S. or the E.U.

That means new competitors coming into the market, including China and Russia, aren't likely to think twice about how they subsidize their aircraft businesses, Havel said. "Russia doesn't even belong to the WTO," he added.

From a real-world perspective, Havel said, new commercial aircraft programs are so expensive that they must rely on some government backing.

Further thoughts from Havel on the dispute can be found in today's edition of the Chicago TribuneSee Julie Johnson, U.S., Boeing Win 1st Round in Airbus Subsidy Dispute, Chi. Tribune, Sept. 5, 2009 (available here).

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