Brussels, 25/02/2015 (Agence Europe) - On Monday 23 February, the WTO dispute settlement body set up a panel to study a European Union complaint against the United States concerning the extension of subsidies granted by Washington State, for the period 2024-2040, to US aircraft manufacturer Boeing and other aerospace companies. Brazil, China, South Korea, India, Japan and Russia reserved their third-party rights to participate in the panel's proceedings.
In its complaint, the EU criticises Washington State's decision to extend significant tax breaks until the end of 2040, when these tax breaks were already found to be illegal by the WTO dispute settlement body in 2012 as part of the EU complaint against US aid to Boeing (DS 353).
The EU criticises the disadvantage that these subsidies created for the European aircraft industry and the fact that the subsidies were conditional upon the use of domestic over imported goods. In the EU's view, Washington State's decision to extend its aid is incompatible with the WTO agreement on subsidies and couterveiling measures (SCM).
The extension of the US aid regime to Boeing is estimated at $8.7 billion and will be the biggest subsidy for the civil aircraft industry in US history.
On 19 December, the EU asked the WTO to open consultations with the US on this issue, but the consultations held on 2 February did not enable the dispute to be settled.
On Monday, the US stated that it considered these measures fully compatible with its obligations under the relevant WTO agreements. In addition, it did not believe that this action from the EU should further delay the initial dispute on Boeing (DS 353), which has been very delayed.
The EU and US counter complaints on the subsidies granted to their respective aircraft manufacturers are still at the stage of being examined by WTO dispute settlement body panels as to whether the parties have achieved compliance with the WTO rulings on each of the two complaints.
Like the US in spring 2012 as part of its complaint against aid to Airbus (DS 316), the EU asked the WTO in October 2012, as part of its complaint against support to Boeing (DS 353), for a panel to check if Washington has taken the measures imposed on it by the WTO ruling on appeal in March 2012 (see EUROPE 10587 and 10709). (Translation from the original French version)