Boeing may Win WTO Case Against $18bn Airbus Subsidies
The WTO’s highest court ruled on 29 February in the
high-profile trade spat between Brussels and Washington over subsidies provided
to US aircraft manufacturer Boeing, sources close to the case told news agency
AFP. The ruling - submitted confidentially to the two parties - is the latest
stage in a seven-year row that has seen both sides accuse
each other of illegally subsidising their respective
passenger plane producers.
Though the results of the Appellate Body ruling remain
private, tensions between the two sides’ respective aircraft giants - Boeing in
the US and Airbus in the EU - have recently been playing out in the public
sphere in anticipation of the result.
This past Monday 27 February, Boeing rebuffed recent
suggestions from the EU and rival producer Airbus that the differences between
the two sides could be resolved in negotiations without preconditions.
The European Union and United States have long fought
over their government support to their domestic aircraft producers, with the
disagreement playing out in twin cases at the WTO.
Wednesday’s expected Appellate Body decision stems from a
WTO panel ruling in March 2011 that Boeing had received US$5.3 billion in illegal
support from Washington (DS353).
Though the EU declared the panel ruling a victory,
Brussels quickly appealed the decision in order to clarify certain points of
law and thus close a time gap between this case and the mirroring case brought
by Washington against Brussels’ aid to Airbus.
For its part, Washington had mounted its own challenge to
EU’s support of its flagship manufacturer, Airbus (DS316).
In May 2011, the Appellate Body determined that EU member states were at fault
for US$18 billion in support to Airbus.
The US is now seeking confirmation from the global trade
arbiter that the EU has not complied with the ruling in the Airbus case, and is
also requesting WTO authorisation to impose hefty
countermeasures.
The trade war between the US and EU over subsidies to
aerospace giants Airbus and Boeing is the world’s largest trade dispute,
affecting a market worth more than US$2 trillion.