WTO ruling opens the way for tariffs (or talks)

Airbus A380 jumbo jet
European loan programs for developing Airbus’ A380 jumbo jet were among the issues addressed in a ruling from the World Trade Organization. (Airbus / e*m Photo / H. Gousse)

The World Trade Organization today issued its final report in a long-running dispute over subsidies for Airbus jets, potentially clearing the way for the U.S. to levy harsh tariffs on European imports.

It’s more likely, however, that U.S. and European officials will bear down on negotiations over complaints that also touch on the Boeing Co.’s tax breaks from Washington state.

Today’s WTO appellate panel ruling determined that Airbus received improper loan subsidies from European governments to launch its A350 and A380 jets. Similar claims, relating to the A320 and A330 lines, were dismissed.

In a statement, U.S. Trade Representative Robert Lighthizer said the ruling “confirms once and for all that the EU has long ignored WTO rules.”

“Unless the EU finally takes action to stop breaking the rules and harming U.S. interests, the United States will have to move forward with countermeasures on EU products,” Lighthizer said.

Boeing CEO Dennis Muilenburg said the ruling affirmed his company’s complaints. “Today’s final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated,” he said in a statement.

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Boeing claims edge in jet subsidy battle

Composite wing center
Boeing’s 777X composite wing center was built in Washington state after lawmakers approved tax incentives for the company. (Boeing Photo)

An appeals panel for the World Trade Organization has reversed an earlier ruling against an $8.7 billion Washington state tax incentive program that persuaded the Boeing Co. to build the 777X jet at its plant in Everett, Wash.

Boeing hailed the Sept. 4 reversal as a “significant victory” for the federal Office of the U.S. Trade Representative and the U.S. aerospace industry, and a “resounding defeat” for the European Union’s efforts to justify subsidies to Airbus.

The ruling “confirms that the tax treatment Boeing and others are receiving in Washington state is not a prohibited subsidy,” Boeing said in a statement.

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WTO rules against Boeing’s 777X tax break

Wing autoclave
A giant autoclave is ready to “cook” parts for the Boeing 777X wings. (Credit: Boeing)

In the latest chapter of a years-long legal battle, the World Trade Organization says Washington state’s tax break for production of the Boeing 777X jetliner runs counter to international trade rules.

“We expect the U.S. to respect the rules, uphold fair competition, and withdraw these subsidies without any delay,” Cecilia Malmström, the European Union’s trade commissioner, said in a statement issued after today’s ruling.

However, U.S. officials and Boeing executives signaled that the battle would continue. The fight over the tax breaks is part of a larger dispute between the Boeing Co. and its European rival, Airbus, with U.S. and EU officials in the middle.

Boeing’s general counsel, J. Michael Luttig, went so far as to claim in a statement that today’s ruling was “a complete victory for the United States, Washington state and Boeing.”

The way Luttig saw it, the WTO rejected “virtually every claim made by the EU in this case” and found that Boeing “has not received a penny of impermissible subsidies.”

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U.S. and Boeing hail WTO ruling against Airbus

Airbus A350 XWB
In today’s report, a compliance panel of the World Trade Organization found that Airbus’ A350 XWB superjumbo jet benefited from European subsidies. (Credit: Airbus)

The World Trade Organization turned up the heat on Europe’s aerospace industry today by ruling that Airbus was continuing to benefit from what’s now estimated at $22 billion in subsidies from the European Union and its member countries.

U.S. Trade Representative Michael Froman hailed the decision as a “sweeping victory” in a dispute that has been simmering for more than a decade, with the Boeing Co. cast as the principal victim of Airbus’ subsidies.

“This long-awaited decision is a victory for fair trade worldwide, and for U.S. aerospace workers in particular,” Dennis Muilenburg, Boeing’s chairman, president and CEO, said in a statement.

Both of Washington state’s U.S. senators and several House members praised the development as well.

The WTO’s latest action marks one more step toward imposing retaliatory trade sanctions that could amount to as much as $10 billion a year.

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