Boeing headquarters

EU Seeks OK to Slap Sanctions Against US over Boeing Dispute

Sept. 27, 2012
EU asks matter be discussed at Oct. 23 meeting Obtaining WTO approval unlikely to happen quickly EU says U.S. has not lived up to obligations to "remove illegal subsidies in the aircraft sector."

The European Union said Thursday it was seeking authorization from the World Trade Organization to slap sanctions on the United States worth $12 billion a year for illegal subsidies to Boeing (IW 500/16).

A European Commission statement said the EU sought permission from the Geneva-based WTO's Dispute Settlement Body "to allow the imposition of countermeasures against the United States."

The $12-billion amount (9.35 billion euros) was "based on estimates of the damages suffered by the EU due to unfair and biased competition from the US industry," it added.

The EU asked for the matter to be discussed at a DSB meeting on Oct. 23.

An EU source said the 27-nation bloc had committed early this year not to apply sanctions without prior approval from the WTO.

Thursday's request to obtain this approval was "likely to take one to two years," the source added.

Boeing and its European rival Airbus have been at odds since 2004 over the issue of government subsidies, with both having won and lost complaints filed against the other at the WTO.

The EU executive said its request to apply penalties "follows the EU's assessment that the United States had not lived up to its obligation to remove its illegal subsidies in the aircraft sector."

The move appears to follow a new chapter this week in the lengthy legal saga between the two global aviation giants.

Washington Missed Deadline, EU Claims

The EU on Tuesday called for new WTO consultations in the case after claiming that Washington had failed to meet a Monday deadline set by the Geneva-based organization to end illegal subsidies to Boeing.

Washington countered the following day by accusing the EU of far greater handouts.

"On the one side we have $19 billion (14.7 billion euros) of illegal financing of Airbus by the EU and on the other side we have $3 billion-$4 billion for Boeing," said Michael Punke, U.S. representative to the WTO.

Copyright Agence France-Presse, 2012

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