World Trade Organisation criticises EU subsidies to Airbus

5 days ago
World Trade Organisation criticises EU subsidies to Airbus

A World Trade Organisation compliance panel has ruled that the European Union has failed to comply with its obligation to remedy the subsidies European governments have provided to support Airbus.

Rather than comply with their WTO obligations to remedy the $17 billion in past subsidies provided to Airbus, the WTO found that EU Member States provided Airbus with new illegal launch aid - reportedly almost $5 billion - so the organisation could launch the new A350.

The decision follows more than a decade of accusations between Boeing and Airbus that each received state funding.

World Trade Organisation officials are yet to rule on a similar EU complaint that the American aviation giant benefits from billions of dollars in tax breaks.

The WTO was explicit in its criticism.

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“It is apparent that the A350 XWB could not have been launched and brought to market in the absence of launch aid,” the judgement explained.

The WTO previously found that essentially no model of the entire Airbus fleet would exist today – including the A300, A310, A320, A330, A340 and A380 – were it not for the illegal subsidies provided by the European governments.

Airbus said it would appeal the judgment and the EU said it found some of the findings “unsatisfactory”.

Under prior WTO rulings the EU had an obligation to remedy the subsidies for its past airplanes, including the A380.

However, the ruling confirms that Airbus both failed to withdraw old subsidies and instead put in place new subsidies for a grand total of almost $22 billion.

That includes $15 billion in launch aid for each Airbus commercial aircraft program from the A300 through the A380, and $2 billion in non-launch aid subsidies.

The WTO also ruled for the first time that Airbus received illegal launch aid for the A350 XWB.

Echoing prior rulings, the WTO panel also found that Airbus and its current product line likely would not even exist without launch aid.

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