Brussels, 19/05/2011 (Agence Europe) - In a further twist in the Airbus-Boeing tit-for-tat complaints affair, the WTO Appellate Body on 18 May partially overturned the decision delivered by the Dispute Settlement Body (DSB) on start-up aid to European aeroplane manufacturer Airbus, challenged by the United States (DS 316), which the DSB ruled to have been illegal for decades. The EU and the US both appealed against the decision.
In conclusions published on Wednesday, the WTO Appellate Body overturned the findings of the expert group which decided that the funding provided by Germany, Spain and the United Kingdom to develop the A380 was conditional on export results and, therefore, against international trade rules. The Appellate Body decided that the group had made an error of interpretation of the rules of the agreement on subsidies and compensatory measures (SCM) which allow WTO member states to regulate these measures. Consequently, the Appellate Body overturned the recommendation of the expert group that the EU end its banned subsidies with in 90 days of the first ruling.
The Appellate Body did not provide Airbus with a blank cheque, however, upholding the findings of the expert group that some subsidies to Airbus by the EU and by certain governments were incompatible with the SCM agreement, and were prejudicial to the interests of the United States. Among the aid mentioned was start-up aid from France, Germany, Spain and the UK for development of the A300, A310, A320, A330/A340, A330-200, A340-500/600 and A380.
As is ever the case, both EU and US cried victory. In Brussels, Trade Commissioner Karel de Gucht hailed an “important result”. “The US central claim that Airbus received prohibited export subsidies has been dismissed in its entirety. In addition, a number of claims, relating to R&D and infrastructure among others, were either rejected or only partially accepted”, he said. The US Trade Department hailed a clear and definitive victory for fair trade, arguing that the WTO appeals body had unequivocally confirmed that Airbus had received massive subsidies over more than 40 years which were very harmful to the United States, leading to losses and a loss of world market share for Boeing.
The DSB must now decide within 30 days whether to accept or reject the Appellate Body ruling. (E.H./transl.rt)