Brussels, 12/03/2011 (Agence Europe) - On Monday 12 March 2012, the World Trade Organisation (WTO)'s appeals body confirmed its May 2011 ruling that the USD 10 billion in public subsidies for US aircraft manufacturer Boeing are illegal.
The European Commission immediately welcomed the ruling, which finds that some of the subsidies provided by the United States' government to Boeing, against which the EU appealed in 2005 (Case DS 354) were illegal. The WTO appeals body rejected the United States' appeal, ruling that the US federal government and various American states had provided Boeing with nearly USD 6 billion in illegal subsidies between 1989 and 2006 in the form of payments by NASA to Boeing's R&D programmes (€2.6 bn), subsidies from Defence Department programmes (€1.2 bn) and federal tax exemptions (USD 2.2 bn). In addition, illegal US government subsidies were granted from 2006 (in a programme running until 2024) in the form of tax reductions by the State of Washington (USD 3.1 bn), making a total of €10 billion in illegal subsidies that the EU appealed against. The European Commission says that the WTO appeals body has gone further than its initial ruling by agreeing with the EU's claims about subsidies to Boeing from the city of Wichita in Kansas to the tune of €476 million. EU Trade Commissioner Karel de Gucht said at the WTO headquarters in Geneva that the verdict clearly confirmed what the EU has long been saying, namely that Boeing is still receiving massive support from the United States' government and from individual states. The long-term cost of these subsidies for European industry amount to billions of euros and this historic decision, he said, clearly shows that the Unitged States has used illegal means to support its industry, which amount to unfair competition. De Gucht said the United States must now end these unfair subsidies. The Commissioner added that he expected the United States to comply with the WTO ruling within six months, but left options open for a negotiated solution. The EU has also been found guilty by the WTO appeals body of illegal support for European aircraft manufacturer Airbus.
Washington reacted to the ruling by saying that it showed that Boeing had received four to six times less in public subsidies than its European competitor Airbus. US Trade Representative Ron Kirk said on Monday that the ruling was a fantastic victory for the United States because using comparable figures, the WTO had only detected between US$3-4 billion dollars of illegal subsidies for Boeing, compared with $18 billion of illegal subsidies for Airbus. (EH/transl.fl)