The European Union (EU) on Friday said that Airbus had agreed with France and Spain to remove contentious benefits granted to the aircraft manufacturer, aiming to end a long-running dispute between the EU and the United States at the World Trade Organization (WTO) over subsidies.

According to an announcement issued by the European Commission, the governments of France and Spain, two of several European countries hosting Airbus factories, have agreed to modify the terms of the Repayable Launch Investment for development of the A350 aircraft to reflect market conditions.

The Commission said the aim of the move was to settle the long-standing dispute which began in 2004, when the U.S. accused France, Spain and Germany – also known as the "Airbus member states" – of providing illegal subsidies and grants to support the production of a range of Airbus products.

Following prolonged legal proceedings, the WTO allowed the U.S. to take countermeasures against European exports worth up to 7.5 billion U.S. dollars in October 2019. The basis for this was a 2018 decision that found that the EU and the "Airbus member states" had not fully complied with previous WTO rulings with regard to Repayable Launch Investment for the A350 and A380 programs.

The EU said Friday's action addressed the last remaining measures condemned by the WTO, and thus removed any grounds for the U.S. to maintain its countermeasures on EU exports.

EU Trade Commissioner Phil Hogan said: "Unjustified tariffs on European products are not acceptable and, arising from the compliance in the Airbus case, we insist that the United States lifts these unjustified tariffs immediately."

In a parallel case, where the EU accused the U.S. of granting subsidies to Boeing, a WTO ruling of April 11, 2019, confirmed that the U.S. had not taken appropriate action to comply with WTO rules. The WTO arbitrator's decision on the value of possible EU retaliation is due in the coming weeks.

"The EU has made specific proposals to reach a negotiated outcome to the long running transatlantic civil aircraft disputes and remains open to work with the U.S. to agree a fair and balanced outcome, as well as on future disciplines for subsidies in the aircraft sector," said Hogan.