WTO Issues Mixed Decision in EU Boeing Subsidy Dispute
The World Trade Organization said
that most U.S. subsidies for Boeing Co.
comply
with international trade rules in a mixed ruling that also ordered Washington State
to end a $325 million tax program for the Chicago-based plane maker.
The WTO urged the U.S. to bring its remaining
WTO-inconsistent measures "into conformity with its obligations," according
to the text of the ruling.
On Thursday the WTO appellate
body partially upheld a 2017 compliance ruling that found the U.S. brought much
of its trade-distorting subsidy programs for Boeing aircraft in compliance with
WTO rules.
But the
Geneva-based trade body didn’t completely vindicate the U.S. and the panel confirmed
that Washington State failed to withdraw certain preferential tax cuts that disadvantaged
Boeing’s European rival, Airbus SE.
The WTO appellate body also reversed several of
the previous panel’s findings regarding U.S. subsidies to Boeing but it said it
was unable to determine if many of those programs had actually harmed Airbus sales.
Both the U.S. and EU praised the ruling as a major
win for their respective aerospace industries in separate statements.
“The WTO has now rejected every allegation of
unlawful subsidies to Boeing with the single exception of one measure -- a Washington
State business and occupancy tax rate,” Boeing said in a press release.
The Washington State tax measure -- which had
a total value of $325 million between 2013 and 2015 -- represents a fraction of
the $10.4 billion worth of illegal subsidies that the EU alleged the U.S. conferred
to Boeing over a six-year period.
“This is a clear victory for the EU and Airbus,"
said Airbus General Council John Harrison. "In the absence of a constructive
approach, the EU now has a very strong legal case to move forward to countermeasures."
Boeing shares traded little changed at $374.21
as of 12:33 p.m. in New York, while shares of Airbus were up 0.5 percent to 116
euros.
The news comes as Boeing struggles to address
safety concerns with its 737 Max jetliner following two deadly crashes in five months.
The plane maker plans to submit software changes to the
Federal Aviation Administration for approval.
The ruling marks the latest chapter in a decades-long
dispute between the EU and the U.S., two traditional allies
whose Transatlantic relationship has frayed after U.S. President Donald Trump imposed
tariffs on the imports of steel and aluminum and withdrew from the Iran nuclear
treaty.