The European Commission has hailed the findings of the WTO Appellate Body that were published on Tuesday 15 May as part of the dispute brought by the USA against EU support to European aircraft manufacturer Airbus (DS 316). The Commission gives assurances that the findings reject the vast majority of the US allegations that the EU did not comply with the WTO conclusions of September 2016.
"The Appellate Body definitively dismissed all US claims that any of the EU support is outright 'prohibited' under WTO rules", the Commission commented. In October 2016 the Commission had appealed the WTO findings on the EU's compliance with the verdict of the Dispute Settlement Body as part of the US complaint (see EUROPE 11631, 11645).
"The WTO Appellate Body (...) has definitively rejected the US challenge on the bulk of EU support to Airbus, and agreed that the EU has largely complied with its original findings. Significantly, it dismissed the vast majority of the US claims that this support had damaged Boeing's aircraft sales", European Trade Commissioner Cecilia Malmström commented.
"The EU will now take swift action to ensure it is fully in line with the WTO's final decision in this case", Malmström added, saying the EU looked forward to the upcoming ruling by the Appellate Body on US compliance with the WTO findings of "the massive and persistent" US government support to Boeing.
The Appellate Body found that the majority of EU support to Airbus challenged by the US had expired in 2011. It ruled that under WTO rules the EU is not required to take any further action regarding state support that no longer exists, such as the alleged support for the A300, A310, A320 and A330/A340 aircraft models.
"This ruling leaves the EU with only a few remaining compliance obligations in order to bring itself fully into line with WTO rules. These are linked to repayable loans provided to the newer A380 and A350 XWB models", the Commission states.
Furthermore, the EU prides itself that the Appellate Body also "significantly downgraded" the assessment of the economic damage that the remaining EU support has allegedly caused to Boeing's aircraft sales.
Although the US had put forward 218 claims of 'adverse effects' to Boeing as a result of alleged support to Airbus, the Appellate Body rejected 94% of US claims and only upheld 14 instances where the support had negatively affected Boeing, related only to the support for the A350 XWB and A380, Airbus assures.
Boeing has also claimed victory, giving assurances that the EU suffered a major setback with "the biggest authorisation of retaliatory customs tariffs ever granted by the WTO".
The US aircraft manufacturer considers that these tariffs could amount to $22 billion (€18.6 billion) – in other words, the amount of the illegal subsidies that Airbus received from the EU, according to its calculations.
This case comes against the backdrop of the counter complaints between the EU and USA on state aid to their aircraft manufacturers, including the dispute brought by the EU against aid to Boeing (DS 353) and an appeal from the EU against Washington State subsidies to Boeing (DS 487). (Original version in French by Emmanuel Hagry)