The EU says it has obeyed WTO rulings by eliminating the harmful effect of government loans to Airbus, but Washington disagrees and is threatening up to $10 billion in sanctions. The EU said it would study the latest U.S. compliance annnouncement.
A senior Boeing executive said last week the EADS-BAE deal raised both national security and industrial questions, and should be reviewed carefully. The company has yet to say how it intends to respond.
CFIUS (pronounced “siffius”) was set up by President Gerald Ford in 1975 to consider the security implications of foreign acquitions of sensitive U.S. companies, or “such other factors” as the president or panel see fit.
“It is a very rigorous and broad review,” said a former U.S. official with knowledge of the oversight procedures.
Aerospace analysts say critics of the move could once again be tempted to use the WTO as a lever by stressing the overlap between military and civil technology. But while that could create a certain amount of political noise, getting the panel to dive into the WTO case alongside its core national security mission may not be easy.
Trade specialists say the panel has not rejected investment into the United States on WTO-related grounds.
“I am sure that there would be legitimate security issues to be examined, but it is hard to see how subsidization of commercial aircraft could be dragged into a national security-focused merger review,” said John Magnus, president at TradeWins LLC, an international trade consultancy based in Washington, DC.
“If they did conclude that a combination of EADS and BAE was threatening on national security grounds, I am confident it would be based on military operations and not on subsidies that Airbus received.”