Copyright 2005 The Financial Times Limited
Financial Times (London, England)

June 1, 2005 Wednesday
London Edition 3

SECTION: INTERNATIONAL ECONOMY; Pg. 8

LENGTH: 446 words

HEADLINE: Disputes 'will not halt pressure for global free trade'

BYLINE: By ALAN BEATTIE and RAPHAEL MINDER

DATELINE: LONDON and BRUSSELS

BODY:


The US and the European Union insisted yesterday that a flurry of disputes would not derail the global push towards freer trade, amid growing fears among trade officials and experts over rising international acrimony.

The EU said yesterday it would revive its dormant World Trade Organisation case against US support for Boeing in retaliation for the American decision, announced on Monday, to start the first stage of litigation against the EU for loans to Airbus.

The escalation of the Airbus-Boeing dispute to WTO litigation follows growing conflict over Chinese textiles, with China strongly criticising planned restrictions on its exports to the US and Europe.

Some officials said such tension threatened the Doha round of trade liberalisation talks, which are already behind schedule in the build-up to a full ministerial meeting in Hong Kong in December. One WTO ambassador from a country in the Cairns Group of agricultural exporters, and a strong supporter of liberalisation, said: "We have been hit by a triple whammy this week - first the Chinese textile dispute, then the French referendum result, and now these Airbus-Boeing complaints."

Peter Mandelson, EU trade commissioner, yesterday lamented the decision to trigger litigation. He said: "Everything that is wrapped up in the Doha round is infinitely more important than what is basically a grudge fight between two companies." He suggested litigation might widen to take in Japan, where Boeing sources some production.

Mr Mandelson added: "I am absolutely determined to make sure that whatever blood is spilt in this aircraft dispute in Geneva, personal relations are not damaged and key negotiators don't fall out."

Sir Peter Sutherland, chairman of Goldman Sachs International and a former head of the WTO, said: "It is highly desirable that (Airbus-Boeing) is placed back solely into the context of bilateral negotiations. All of this is unhelpful to Doha."

The US trade representative's office fiercely rejected the idea that it was jeopardising global trade. "History shows that big disputes can be successfully channelled through the WTO dispute settlement mechanism while separately we work on shared objectives," said Richard Mills, spokesman.

US officials pointed out that WTO litigation over its steel tariffs and a tax rebate on foreign sales, and the EU's ban on genetically modified food, had not prevented transatlantic co-operation in global trade talks.

Mr Mandelson said the Airbus-Boeing litigation was likely to be self-defeating. "Is Europe really going to spark a trade war in order to enforce a favourable ruling against Boeing? I should hope not," he said. Editorial Comment, Page 16 Lex, Page 18

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