Airbus critical of Boeing following latest WTO ruling

Airbus critical of Boeing following latest WTO ruling

The United States has failed to comply with WTO rulings in the more than decade-long ongoing transatlantic battle over commercial aircraft subsidies, according to a new report by the World Trade Organisation’s compliance panel.

The body is investigating the DS353 dispute, which relates to billions of dollars in subsidies granted to Boeing.

In March 2012, the World Trade Organisation ruled that a number of subsides provided by the US to Boeing were illegal, and were to be withdrawn within six months, or alternatively that their adverse effects were to be removed.

In September 2012, the US claimed it had taken all necessary steps to achieve compliance.

Today, the EU prevailed in demonstrating the continuing existence of a number of illegal subsidies, including research support provided by NASA and the department of defence, and the multi-billion dollar tax breaks from Washington State.

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The EU has also prevailed in demonstrating continuing adverse effects caused by some of those subsidies.

For a further five years, and by failing to comply with the WTO rulings, the US has continued to provide tremendous benefits to Boeing in the form of unfair and anti-competitive subsidies, resulting in an additional loss of sales of at least 300 aircraft, with an estimated value of US$ 15-20 billion, rival Airbus said in a statement.

In total, combining this with the WTO’s ruling at the end of 2016 in the DS487 dispute, addressing the illegal subsidies for the 777X, as well as prior rulings in DS353, the total impact of the subsidies is estimated to add up to US$100 billion in lost sales to Airbus.

Tom Enders, chief executive of Airbus, stated: “The amount of money involved completely distorts trade.

“There is absolutely no place for these unfair and anti-competitive practices in today’s modern and dynamic global marketplace, and the WTO should make it clear that no government or company can escape from their international responsibilities.”

Enders added: “I salute the EU for what again is a great victory for fair trade in commercial aviation.

“The clarity provided by the WTO in continuous rulings over a decade is impressive and far reaching: first, the WTO stated that the US subsidy system provides largely for illegal grants while the European reimbursable launch investment system based on loans is principally compliant with international trade law.

“Today, the WTO panel has demonstrated how Boeing continues to seek the benefits from this extensive illegal support, at the great expense of a level playing field in the worldwide aviation industry.”