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Issue #590 | Perishables | Mediterranean | Middle East | Africa Trade

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2014 Media Kit
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WTO hands over confidential report on Boeing aid

By: | at 08:00 PM | International Trade  

The World Trade Organization delivered an interim ruling into the legality of U.S. government support for Boeing which will help determine the outcome of a trans-Atlantic aerospace industry row.

The confidential ruling, which will not be made public for another 6-12 months, was handed to officials of the United States and European Union, the two trading powers contesting the case.

Both U.S. and European sources say the report is likely to back some of the EU’s claims that Boeing benefited unfairly from unfair or illegal government aid totalling $24 billion.

European officials hope that will encourage the United States to negotiate a settlement to the quarrel over subsidies for aircraft, the world’s biggest trade dispute.

Boeing argues that any aid for which Washington is faulted pales in comparison with subsidies for its European rival Airbus that were resoundingly denounced by the WTO in a ruling in a parallel case published in June.

The United States opposes talks until the EU drops aid for Airbus’s new A350 airliner which it says is similar to the other Airbus support already condemned by the WTO.

In a statement released earlier on Wednesday, Boeing said the June WTO ruling against the European Union had found some of the “launch aid” Airbus received from the EU and member states had violated global trade rules.

“We look forward to hearing how the WTO ruled in today’s preliminary decision on U.S. practices, none of which have the market-distorting impact of launch aid nor even approach the sheer scale of European subsidy practices,” Boeing said.

Though the two cases are being arbitrated separately at the WTO, they are part of a tit-for-tat battle pitting Brussels against Washington on behalf of their respective aircraft manufacturers.

Officials on both sides of the Atlantic believe the WTO findings on Boeing will give a fuller picture of what kind of government support is acceptable in the sector.

Washington has a slight tactical advantage because it would be in a position to impose trade retaliation earlier than Brussels can if the U.S. victory against Airbus subsidies is upheld. Both sides have appealed. (Reuters)