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with state aid. In an average year it repays about $500m.<br />

The WTO’s ruling on Europe’s complaint should come within <strong>the</strong> next six months. It would not be<br />

surprising if both complaints were upheld, at least in part. Both parties say <strong>the</strong>y are willing to negotiate a<br />

new deal limiting subsidies and making those that remain more transparent. That would send out a<br />

message to o<strong>the</strong>r countries (Russia and China) wanting to muscle in to <strong>the</strong> large commercial aircraft<br />

market. But both sides also want to see who comes out of <strong>the</strong> WTO process worst before starting talks.<br />

Unfortunately, <strong>the</strong>re will be plenty of opportunities to escalate hostilities in <strong>the</strong> meantime. In <strong>the</strong> next few<br />

weeks European governments are expected to agree to give some €3.5 billion ($5 billion) in launch aid for<br />

<strong>the</strong> A350. Boeing describes it as a “provocative” move, but an Airbus spokesman says <strong>the</strong> aid is not in<br />

doubt and that Europe will not be “intimidated”. Ano<strong>the</strong>r bone of contention is <strong>the</strong> battle between Boeing<br />

and Airbus, with its partner Northrop Grumman, to supply America’s air force with its next fuel tanker—a<br />

contract won by Airbus last year which is being fought over again after Boeing protested. The grounds for<br />

fur<strong>the</strong>r complaint, and thus <strong>the</strong> opportunities for inflicting mutual damage, are immense.<br />

Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.<br />

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