On Friday 9 June, the World Trade Organisation (WTO) criticised the USA's illegal payment of subsidies to US aircraft manufacturer Boeing, in violation of the decision imposed by WTO's Appellate Body in 2012 (see EUROPE 11262).
"The EU secures another important win in the WTO Boeing dispute", the European Commission states in a press release.
The WTO panel has published its report on bringing the USA into conformity with the verdict of the WTO (dating back to March 2012) on the EU's complaint about aid to Boeing (Case DS 353: second complaint on the measures affecting trade in large civil aircraft).
The report confirms the EU's concerns that the USA has not put a stop to its subsidies – which is considered incompatible with WTO rules.
"The WTO ruling confirms that the United States has taken no appropriate action to comply with its obligation to withdraw subsidies declared illegal by the WTO's Appellate Body in 2012, or to remove their adverse effects", the European Commission states.
The Commission says that the WTO thus confirms the EU's position, noting that the USA: - has failed to remove the existing subsidies; - has extended them; - and has added significant new distorting subsidies (including incentives for South Carolina and a US Federal Aviation Administration R&D programme).
Severe damage to Airbus in lost sales and market opportunities. The WTO confirms that the US subsidies to Boeing continue to cause severe damage to Airbus. Because of certain subsidies to Boeing, the company's European competitor Airbus has lost the sales of hundreds of aeroplanes, which represents estimated losses of $15-$20 billion. Taking account of the WTO's assessments (including as part of DS 487 on subsidies to Boeing for the 777X model – see EUROPE 11677), the total value of losses incurred by Airbus is reportedly over $100 billion.
"This ruling is another victory for the EU, its industry and EU workers in this strategic sector. The panel agrees that the US has simply ignored existing WTO rulings and has continued to subsidise Boeing", EU Trade Commissioner Cecilia Malmström stated.
"This is a damning report. Boeing has been taking advantage of US aid for far too long now, hampering competition with Airbus", Franck Proust MEP (EPP, France) stated. Cumulatively, this aid reportedly represents tens of billions of euro. Proust says he is shocked by the USA's inability to respect either the WTO's rules or the promises of the 1992 agreement. He fears that Donald Trump's response will be as disproportionate as the aid received by Boeing.
According to WTO rules, each party has a period of 60 days to appeal this decision. Boeing and Airbus have been in confrontation before the WTO since 2004 as regards their reciprocal subsidies. (Original version in French by Lionel Changeur)