Airbus-Boeing dispute - US formally seeks authorisation for taking countermeasures

The United States on 9th December, 2011 has formally sought authorisation from the WTO Dispute Settlement Body to take countermeasures against the European Union and France, Germany, Spain and UK in the Aircraft case.

It stated,

" The United States considers that the European Union ("EU") and France, Germany, Spain, and the United Kingdom ("certain member States") have failed to comply with the recommendations and rulings of the Dispute Settlement Body ("DSB") in the dispute  European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft (DS316) ("EC – Large Civil Aircraft").  Pursuant to Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") and Article 7.9 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"), the United States requests authorization from the Dispute Settlement Body ("DSB") to take countermeasures with respect to the European Union ("EU") at an annual level commensurate with the degree and nature of the adverse effects caused to the interests of the United States by the failure of the EU and certain member States to withdraw subsidies or remove their adverse effects in compliance with the recommendations and rulings of the DSB.  This amount corresponds to the annual value of lost sales, of imports of US large civil aircraft displaced from the EU market, and of exports of US large civil aircraft displaced from third country markets.  The amount will be updated annually using the most recent publicly available data.  Based on currently available data in a recent period, the United States estimates this figure to be between $7 and $10 billion per year."

The countermeasures that the United States has sought in this regard are :

"  In considering what countermeasures to take, the United States followed the principles and procedures set forth in Article 22.3 of the DSU.  As required by Article 7.9 of the SCM Agreement, the countermeasures are commensurate on an annual basis with the degree and nature of the adverse effects determined to exist.  The United States considers that it is neither practicable nor effective to suspend concessions or other obligations on imports of EU goods up to a value of approximately US $10 billion.  The United States also considers that, given the degree and  nature of the adverse effects, the circumstances are "serious enough" within the meaning of Article 22.3(c) of the DSU.  Therefore, the United States may suspend  concessions or other obligations under the  General Agreement on Trade in Services. The countermeasures would consist of one or more of the following: 

(1) suspension of tariff concessions and related obligations (including most-favorednation obligations) under the General Agreement on Tariffs and Trade 1994 on a list of products of the EU and certain member States to be drawn from the harmonized Tariff Schedule of the United States; and 

(2) suspension of horizontal or sectoral concessions and obligations contained in the US Schedule of Specific Commitments with regard to all services defined in the Services Sectoral Classification List, except for financial services (sector 7)"