WTO Rules In US, EU Dispute Over Planemaker Subsidies
The World Trade Organization issued a ruling Monday in an ongoing dispute between US and European officials over subsidies paid to Boeing and Airbus. Neither side wasted any time in declaring the ruling as a victory for their side, as officials from both sides of the Atlantic issued statements just minutes after the ruling. “This decision is a tremendous victory for American manufacturers and workers,” read a statement from US Trade Representative Ron Kirk, echoing a similar statement from EU Trade Commissioner Karel De Gucht.
The dispute goes all the way back to 2004, when EU officials claimed that Chicago-based Boeing received $19 billion in subsidies from US and state officials between 1989 and 2006, constituting unfair international trade practices. Later that same year, US officials claimed that France-based Airbus had received unfair subsidies from various European nations. In its ruling, the WTO indicated that Boeing had received between $3 billion and $4 billion in subsidies, according to Kirk, whereas the WTO ruled in December that Airbus had received $18 billion.
While the ruling would appear to favor the American aviation industry, EU officials pointed out that it proves that Boeing has benefited from subsidies considered illegal under WTO rules. Nevertheless, the WTO rejected about two-thirds of the EU’s claims that the illegal subsidies paid to Boeing had resulted in lost sales for Airbus, a subsidiary of the European Aeronautic Defense & Space Co, also known as EADS.