World Trade Organization upholds ruling on illegal Boeing aid
Monday, March 12, 2012
GENEVA -- Boeing subsidies from the United States and individual states damaged rival Airbus by more than $5.3 billion, World Trade Organization judges said Monday as they upheld an earlier ruling and agreed with Airbus the harm was well above that amount, though the panel didn’t name a figure.The WTO’s Appellate Body backed a March 2011 report finding the U.S. provided aid to Chicago-based Boeing through federal research grants and state support in developing aircraft including the 787 Dreamliner. Airbus parent European Aeronautic, Defence & Space Co. has said the aid to Boeing cost it $45 billion in lost sales from 2002 to 2006.
While both the European Union and the U.S. appealed the initial ruling, appellate judges in Geneva backed the EU on all of its points, in particular reversing an earlier finding that only two of 23 Department of Defense programs gave illegal aid. The judges said that subsidies from all 23 programs violated global trade rules and reversed an earlier ruling that tax breaks from Kansas didn’t cause adverse effects.
The Appellate Body backed the U.S. in its argument that subsidies for Boeing’s 777 aircraft didn’t harm the Airbus A340.
The WTO has also ruled that Airbus received billions of euros in low-interest loans from EU governments, and the U.S. has asked the trade arbiter to approve retaliatory sanctions of as much as $10 billion for the EU’s failure to comply with that ruling. The 27-nation bloc says a solution to the trade dispute, the world’s most costly, must only come through negotiations.
There were also three Washington state tax breaks valued at as much as $4 billion from 2006-2024.