Airbus Claims Big Victory in Boeing WTO Dispute

Boeing described the appeals ruling as a 'clear, final win for fair trade.'

The World Trade Organization's appeal body on May 18 overturned part of its ruling on Washington's complaint against the European Union over aid for aviation giant Airbus. While the appellate body upheld findings that some subsidies provided by Brussels "have caused serious prejudice to the interests of the United States," it reversed a key finding that financing by Germany, Spain and Britain for the development of the A380 superjumbo amounted to an export subsidy.

"As a consequence, the appellate body reversed the panel's recommendation that the European Union withdraw prohibited subsidies within 90 days," the WTO said.

Airbus claimed a major victor. "This is a big win for Europe," said Airbus chief executive Tom Ender.

The European Union had appealed a WTO ruling last year that found illegal some of the multi-billion dollar aid for Airbus to help it develop large civilian aircraft.

"It is good to see that the WTO has fully green lighted the public-private partnership instruments with France, Germany, Spain and the UK," said Enders. "We now can and will continue this kind of partnership on future development programs," he added.

In a 1,200-page ruling issued in June 2010, the WTO said EU states should halt some aid for the development and export of Airbus airliners. It notably accepted three out of seven claims by Washington that key launch aid amounted to export subsidies, which are illegal under WTO rules.

Boeing has estimated that the illegal aid amounted to some $18 billion.

However, both Washington and Boeing downplayed the finding.

Boeing described the appeals ruling as a "clear, final win for fair trade."

U.S. Trade Representative Ron Kirk also noted that the appeals body "confirmed without a doubt that Airbus received massive subsidies for more than 40 years and that these subsidies have greatly harmed the United States, including causing Boeing to lose sales and market share in key markets throughout the world."

Kirk claimed that the overturned finding amounted to a small fraction of the illegal subsidies.

"While it revised the underlying findings for the United States from $20 billion to $18 billion, the message in the Appellate Body report is clear -- launch aid is illegal and the European Union and the member states should refrain from future launch aid disbursements," he stressed.

Copyright Agence France-Presse, 2011

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