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To: Alex who wrote (52584)	5/11/2000 10:07:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116832

This could be "the final straw" it takes to break the new economy: BUSINESS Super-jumbo trade war ahead The Americans have Airbus subsidies in their sights again and will challenge them at the World Trade Organisation The airline industry Search archive AMERICA?S trade negotiators went on the offensive this week, taking six cases to the World Trade Organisation (WTO). Their targets included Romanian chickens, Philippine motorcycles, Brazilian textiles and India?s protectionist inward investment rules. But this is mere skirmishing compared with the huge trade row that looms over the launch of Airbus Industrie?s double-decker super-jumbo, known as the A3XX. The Americans are smarting from several recent trade setbacks, most of which they blame on Europe. They won cases at the WTO on bananas and hormones in beef, but the Europeans still refuse to change their rules to comply. The WTO recently declared that American foreign sales corporations, offshore companies which allow American multinationals to save some $3.9 billion a year in taxes, were illegal. This week the Americans put to the European Union their plan to comply with this ruling. One of the principal victims of this ruling will be the Boeing Commercial Aircraft Group. In 1998 the use of foreign sales corporations saved it $150m in tax. But Boeing?s revenge could come soon. This week Charlene Barshefsky, the American trade representative, warned that she might soon add to her list a case against subsidies to Airbus Industrie, the European rival to Boeing in the market for big airliners. Airbus has already bitten into Boeing?s dominant position, and the two now share this market roughly equally. But Boeing reigns supreme at the top end, since no other aircraft carries as many passengers as the Boeing 747. Airbus suspects that Boeing is able to use its monopoly profits on the 747 to keep down its prices for smaller aircraft and so snatch away Airbus sales. Boeing naturally denies this, but there is a lingering suspicion that Airbus needs the new super-jumbo more than the market does. Boeing has been growing restive over Airbus subsidies. (cont) economist.com