Brussels, 19/12/2014 (Agence Europe) - On Friday 19 December, the EU asked the WTO to open consultations with the USA on the continuation of subsidies granted by Washington to US aircraft manufacturer Boeing and other aerospace companies for the 2024-2040 period.
As part of the EU complaint against the Boeing aid (DS 353), the WTO's dispute settlement body (DSB) ruled in 2012 that the tax benefits from Washington State - originally available until 2024 - were incompatible with the WTO rules, the Commission states in a press release. The European request lodged on Friday regarding Washington State's decision to continue subsidising the US aerospace industry beyond 2024 despite the 2012 verdict “is thus a consistent and necessary step in this dispute”, the European Commission states.
The extended subsidies are prohibited under the WTO subsidies and countervailing measures agreement because they require the beneficiary to use domestic goods rather than imported ones. The subsidies scheme extension is estimated to be worth US$8.7 billion and will be the largest subsidy for the civil aerospace industry in US history.
As the formal starting point for the WTO dispute settlement procedure, the consultations last 60 days, after which - if a satisfactory solution has not been found between the parties - the complainant can request that the issue be sent to a special panel tasked with ruling on the complaint.
The counter complaints filed by the EU and the US against subsidies granted to their respective aircraft manufacturers are still being examined by special groups of the WTO DSB for the compliance of the parties with the WTO rulings on each of the complaints.
As the US had done in spring 2012 as part of their complaint against aid to Airbus (DS 316), the EU called on the WTO in October 2012, as part of its complaint against support to Boeing (DS 353), for a special group to check if Washington has taken the measures imposed on it by the appeal verdict of the WTO in March 2012 (see EUROPE 10587 and EUROPE 10709). (EH)