Airbus offers ‘final’ concession to ease jet subsidy dispute

European planemaker Airbus on Friday made what it described as a final step aimed at stopping a transatlantic trade war over billions of dollars of aircraft subsidies.

Airbus said it had agreed to pay higher interest rates on government loans it received from France and Spain to help develop its A350 jet, which entered service in 2015.

It did not reveal the cost of the extra payments, which drop due whenever the plane is delivered abroad.

The government loans are among European measures that the World Trade Organization has deemed illegal subsidies as part of a pair of cases also implicating US support for Boeing.

The European Union’s failure to withdraw Airbus subsidies completely led to WTO approval for US sanctions starting from late last year on up to $7.5 billion of goods ranging from wine to whisky.

Trade groups are bracing for an escalation of the row in the autumn when the EU is expected to win WTO approval to hit back with its own tariffs on US goods in retaliation for subsidies for Boeing, which the Geneva trade body also found illegal.

In a record dispute dating back to 2004, the WTO has ruled that the EU and United States awarded subsidies to their respective jet makers. But for the last eight years, the argument has mainly been about whether each side obeyed those rulings.

“With this final move, Airbus considers itself in complete compliance with all WTO rulings,” Airbus said.

In May, the United States declared itself in full compliance with WTO findings after Washington state abolished aerospace tax breaks that largely benefited Boeing.

Although Airbus is not officially a party to the case, which pits the United States against the EU as well as Britain, France, Germany and Spain, Friday’s statement opens the door for negotiations to end the dispute, a European source said.

Both sides have repeatedly urged negotiations while accusing the other of failing to respond seriously to the invitation.