The sky war resumes
Here we go again. The US government has today launched yet another salvo in its long-running conflict with the EU over aircraft subsidies, announcing that it is to file a new complaint at the WTO against European subsidies for Airbus. Before you could say "Boeing", Brussels made clear that it would hit back with its own tit-for-tat complaint. So much for the fragile truce that had held since February.
Given how politicised the Airbus-Boeing war has become on both sides of the Atlantic, it is perhaps surprising that the Bush administration did not file a complaint before the mid-term elections, in time to swing come crucial votes to the Republicans. Perhaps, then, the new WTO complaint is a response to the mood of economic populism that the Democrats were so successful at tapping into.
In any case, it is yet another headache for the WTO: a no-win case that will aggravate both sides and resolve nothing. Most likely, the WTO will find fault with both the US and the EU - and then what?
It is surely too much to hope that America and Europe will stop subsidising their national champions simply because of a slap on the wrist from the WTO. The worry is that the war in the sky could broaden into a ground war too, with each side also taking aim, for instance, at their farm subsidies.
