EU and Airbus Achieve Major Win Against US with Solid Basis for Billions In Countermeasures
(Source: Airbus; issued March 28, 2018)
AMSTERDAM --- Airbus welcomes the report of the WTO Appellate Body, published today, which confirms that the United States failed to withdraw the subsidies granted by federal, state and local authorities to Boeing, and to remove the harm those subsidies caused to Airbus.
The Appellate Body has rejected every single United States argument whereas it has taken all EU legal points on board. In addition, the WTO highest court has also qualified a number of additional US federal and state programmes as illegal subsidies, and even, as prohibited subsidies as in the case of the Foreign Sales Corporation scheme (FSC), a major win for the EU.
The report requests that further compliance steps are necessary from the United States and Boeing. Failure to do so will provide the European Union the possibility to seek countermeasures on imports of US products.
Airbus General Counsel John Harrison stated: “This is a clear victory for the EU and Airbus. It vindicates our position that Boeing, while pointing fingers at Airbus, has not taken any action to comply with its WTO obligations, contrary to Airbus and the EU. With this damaging report, continuing to deny they receive massive illegal subsidies from the United States government is no longer an option. Stated differently, absent settlement, the US will pay - in perpetuity – billions in annual sanctions driven by every single flying Boeing programme, while the EU would face, in the worst case, only minor issues.”
He added: “We hope that these findings will prompt the United States and Boeing to move forward constructively in this long-standing dispute and join us in working towards a fair-trade environment. In the absence of a constructive approach, the EU now has a very strong legal case to move forward to countermeasures.”
Airbus thanks the European Commission and the governments of France, Germany, the United Kingdom and Spain for their continuous support throughout the long dispute process. Their longstanding efforts to restore a fair level playing field are now clearly showing results.
EU Scores Final Victory in the WTO Boeing Dispute
(Source: European Commission; issued March 28, 2019)
BRUSSELS --- The EU welcomes today's ruling by the World Trade Organisation (WTO) Appellate Body, vindicating the EU's long held position that the United States has taken no steps to comply with WTO rules on support to Boeing.
The ruling concludes definitively that the US has continued to subsidise the company illegally despite previous rulings condemning this behaviour. This has caused significant harm to its European competitor Airbus.
Today's ruling by the WTO's Appellate Body confirms the European Union's position that the United States has failed to remove the massive and trade distorting subsidies it is granting to Boeing. The WTO sided with the EU in its argument that several US measures, notably the Washington State tax programme and business incentives from South Carolina are in fact subsidies. The Appellate Body dismissed all of the US appeal points.
Commissioner for Trade Cecilia Malmström said: "Today's ruling is a welcome one for the EU, its aircraft-producing industry and workers across EU Member States in this strategic sector. The Appellate Body has now settled this case definitively, confirming our view the US has continued to subsidise Boeing despite WTO rulings to the contrary. We will continue to defend a level-playing field for our industry. European companies must be able to compete on fair and equal terms and today's ruling is important in this respect."
Significantly, the Appellate Body supported the EU claim that Boeing still benefits from an illegal tax concession granted by the US through an export support measure (through the Foreign Sales Corporation and Extraterritorial Income Exclusion, or FSC/ETI). This subsidy had already been qualified as prohibited at the first stages of the dispute. Prohibited subsidies are considered the most trade distortive category of subsidies and are illegal under WTO rules.
The Appellate Body also found that US subsidies to Boeing continue to cause severe damage to Airbus' market opportunities, notably in the form of lost sales.
In 2012 the WTO ruled that the United States had granted massive subsidies to Boeing in violation of WTO rules. Between 1989 and 2006 Boeing benefited from NASA, US Department of Defence and Washington State/Kansas subsidies totalling over $5 billion. The subsidies allowed Boeing to sell its aircraft more cheaply, to the detriment of Airbus.
Today's decision marks the final step in the compliance proceedings launched in 2012 in this long running dispute. The EU expects the United States to promptly comply with this final ruling.