Airbus floors Boeing in subsidies row

In Summary

Airbus and the European Union have secured a landmark ruling against Boeing and the United States […]

Airbus and the European Union have secured a landmark ruling against Boeing and the United States in a decades old dispute over subsidies to their respective aircraft manufacturers. In a ruling March 28, the WTO Appellate Body concluded that the United States failed to withdraw the illegal subsidies granted to Boeing by federal, state and local authorities in support of several aircraft development programmes by the US airframer. Those subsidies caused harm to Airbus in the marketplace.

The Appellate Body also struck out all claims by the United States against Airbus and the EU while adding to the list of illegal subsidies that US federal and state programmes have extended to enable Boeing launch new aircraft types such as the Boeing 787 and 777X.

The report ruled that further compliance steps are necessary from the United States and Boeing with failure to do so providing the European Union entitlement to countermeasures on imports of US products.

Commenting on the ruling, Airbus General Counsel John Harrison said it was a a clear victory for the EU and Airbus.   “It vindicates our position that Boeing, while pointing fingers at Airbus, has not taken any action to comply with its WTO obligations, contrary to Airbus and the EU. With this damaging report, continuing to deny they receive massive illegal subsidies from the United States government is no longer an option. Stated differently, absent settlement, the US will pay – in perpetuity – billions in annual sanctions driven by every single flying Boeing programme, while the EU would face, in the worst case, only minor issues.

He added: “We hope that these findings will prompt the United States and Boeing to move forward constructively in this long-standing dispute and join us in working towards a fair-trade environment. In the absence of a constructive approach, the EU now has a very strong legal case to move forward to countermeasures.”

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