EU, US claim victory in Boeing-Airbus dispute

Appeals panel says US gave illegal subsidies to Boeing, but at lower levels than EU subsidies to Airbus.

The European Union this week welcomed a ruling from the World Trade Organization (WTO) that subsidies granted to the American aviation firm Boeing by the United States federal and state governments were incompatible with international trade rules.

The US countered that most of the support programmes challenged by the EU had not been ruled illegal.

Ron Kirk, the US trade representative, said: “It is now clear that European subsidies to Airbus are far larger – by multiples – and far more distortive than anything that the United States does for Boeing.”

The ruling on Boeing came from a WTO appeals panel, which was asked to examine the findings of a dispute-settlement panel. That panel had ruled last year that subsidies granted to Boeing were illegal.

The European Commission claimed that the appeals panel decision “went even further than the previous WTO panel ruling in supporting the EU’s claims”.

According to the Commission, the appeals panel found that US federal and state governments had granted between $5 billion and $6bn of subsidies that were WTO-incompatible between 1989 and 2006. Kirk’s interpretation was that the panel had estimated $3bn-$4bn of illegal subsidies.

He contrasted this with EU subsidies to Airbus worth $18bn, which had been ruled WTO-incompatible by an appeals panel last May.

With the Boeing ruling now delivered, the two sides have exhausted the WTO procedures for both the EU case against Boeing and the US case against Airbus. An EU official suggested that the significance of the ruling was that it would increase pressure on the two sides to reach a negotiated solution on the long drawn-out trade dispute.