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WTO rules against Boeing; war of words continues

written by australianaviation.com.au | March 13, 2012

Airbus has suggested that Boeing's 787 Dreamliner should be renamed the "7aid7 Subsidy-liner." (Boeing)

The World Trade Organisation has upheld most of its 2010 ruling against Boeing, finding that the aerospace giant received billions in illegal subsidies from US federal and state agencies.

The WTO did not put a precise figure on the size of the subsidies but the total was far below the nearly $24 billion in illegal support alleged by the European Union as part of long running trade tiff involving government aid to rivals Boeing and Airbus.

US Trade Representative Ron Kirk, calling the WTO ruling “a tremendous victory,” said the WTO had found impermissible subsidies of between $3 and $4 billion. He said Washington “is ready to address all of the WTO findings.”

EU Trade Commissioner Karel De Gucht, who called the ruling “a clear victory” for Europe, said the WTO had found illegal US subsidies of between $5 and $6 billion.

It appears unlikely the latest ruling will settle what has become an increasingly acrimonious cross-Atlantic dispute. In a parallel case brought by the US, the WTO late last year ruled that the EU had given $18 billion in illegal subsidies to Airbus. The EU has since disputed the figure, while the US has accused Brussels of an insufficient response to the ruling. Washington is said to be considering punitive measures against the EU, possibly including up to $10 billion in annual penalties.


In the meantime, Airbus hailed the latest battle as a “sweeping loss for Boeing.” Suggesting that Boeing’s 787 Dreamliner ought to be renamed the “7aid7 Subsidy-liner,” Airbus said the 787 was “the most heavily subsidised aircraft in aviation history.”

But in its own statement, Boeing said it was Airbus that had received the most government subsidies.

“The WTO decisions in the two cases establish conclusively and finally that European subsidies competitively disadvantage Boeing and American workers,” Boeing said.

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