U.S., EU Both Claim Victory as WTO Releases Ruling in Boeing, Airbus Dispute

March 12, 2012
The WTO findings are the latest chapter in the seven-year-long trade battle over state aid to rival aircraft makers.

The United States said Monday that the World Trade Organization has confirmed that Europe's unfair trade subsidies to aircraft maker Airbus have dwarfed U.S. aid to Boeing.

By contrast, the European Commission said the WTO appeal ruling confirmed billions of dollars in U.S. subsidies to Boeing were illegal under WTO rules.

"This decision is a tremendous victory for American manufacturers and workers -- and demonstrates the Obama administration's commitment to ensuring a level playing field for Americans," Ron Kirk, the U.S. Trade Representative, said in a statement before a WTO appeals panel published its findings.

"It is now clear that European subsidies to Airbus are far larger -- by multiples -- and far more distortive than anything that the United States does for Boeing," he said.

The U.S. highlighted that the WTO had found last May that the European Union gave Airbus $18 billion in subsidized funding that resulted in lost market share and sales of 342 U.S.-made large civil aircraft.

"In today's findings, the comparable figures [for Boeing] were between $3 and $4 billion in U.S. subsidies, and lost sales [for Airbus] of just slightly more than 100 aircraft," the statement said.

Kirk said that the United States "is ready to address all of the WTO findings, and we expect Europe to do the same."

The WTO handed down its ruling to the parties in the dispute on Feb. 29, although the details were kept confidential.

The findings, the latest chapter in the seven-year-long trade battle over state aid to rival aircraft makers, were published Monday.

"Today's ruling vindicates the EU's long-held claims that Boeing has received massive U.S. government handouts in the past and continues to do so today," said EU Trade Commissioner Karel De Gucht.

"The costs to EU industry from these long-term subsidies run into billions of euro," he added in a statement released in Brussels.

Airbus said Monday that a WTO appeal ruling confirmed and expanded earlier findings on U.S. subsidies for rival Boeing.

"Today's report from the World Trade Organization (WTO) appellate body confirms and even extends previous WTO findings," the company said in a statement ahead of the WTO publishing the text of the ruling.

"The report confirms the existence of illegal U.S. subsidies to Boeing -- previously identified by the WTO as 'at least $5.3 billion' and extended by billions of U.S. dollars as a result of today's decision -- resulting in an estimated loss of approximately $45 billion in sales for Airbus," it added.

Six Times the Subsidies

Boeing said the WTO ruling showed that Airbus had received about six times the subsidies it had.

The ruling also "slashed earlier findings of harm to Airbus from U.S. subsidies," Boeing said in a statement.

"The decision confirms that in terms of amount, effect and nature, U.S. government support to Boeing is minimal in comparison to the massive European subsidies provided Airbus," Chicago-based Boeing said.

Boeing said the WTO had found that European launch aid for Airbus was a "pernicious, market-distorting subsidy without which Airbus itself would most likely not have existed and no Airbus aircraft would have been built at all."

"The WTO decisions ... establish conclusively and finally that European subsidies competitively disadvantage Boeing and American workers and will continue to do so until launch aid is eliminated," Boeing said.

Copyright Agence France-Presse, 2012

See Also:

WTO Gives Ruling on Airbus-Boeing State-Aid Dispute

Boeing-Airbus Fight Intensifies Over E.U. Reparations

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