Jet Deal May Violate GATT, Airbus Says

The $6-billion U.S.-Saudi aircraft deal announced by President Clinton on Wednesday might be in violation of recently concluded world trade talks, according to Airbus Industrie, the European plane manufacturers consortium.

If the United States allowed Saudi Arabia to reschedule payments on military equipment orders as an incentive to buy the planes, the deal would violate GATT, the General Agreement on Tariffs and Trade, Airbus spokesman Sean Lee said.

Under the deal, Saudi Arabia will upgrade its flagship Saudia Airlines with 50 planes made by Boeing Co. and McDonnell Douglas Corp. Airbus, a four-nation consortium, had been vigorously wooing the Saudis and was expected to be awarded at least part of the deal.

Lee said Saudia has not told Airbus of its decision. “As of today, we have not had any information from Saudia or confirmation or rejection of our proposal for aircraft,” he said in a telephone interview from the consortium’s headquarters in Toulouse in southern France.

Airbus employees were taken aback at Clinton’s personal announcement of the deal, an Airbus executive said on condition of anonymity.

Washington has strongly criticized Airbus for receiving what it calls official subsidies from the governments of the four countries that make up the consortium--France, Germany, Britain and Spain.

Airbus counters that its “launch aid” is instead loans that are repaid regularly and that American aircraft manufacturers themselves benefit from indirect subsidies in the form of U.S. military research and development contracts, resulting in such planes as the Boeing 707 and 747 and the MD-11.

“There is a catalogue of hypocrisy here,” the Airbus executive said. “From the person accusing us of unfair support, it’s the most incredibly overt sales campaign we’ve ever seen. (Clinton) has basically gone and sold his aircraft. It looks very much like Airbus versus the President of the United States.”