WTO to rule in Boeing aid dispute next week: sources

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The FINANCIAL — The World Trade Organization will rule on Wednesday on an EU complaint against US state support for Boeing in a more than seven-year-old aerospace trade war, sources close to the case said.

 

The date of publication will depend on the number of remarks then submitted by the two parties.

According to eubusiness, there are two cases currently lodged with the WTO — one by Boeing against allegedly illegal subsidies for Airbus and a second by Airbus, which made the same claim against its industry rival.

The EU responded in December to a WTO deadline to say how it intends to comply with the body's ruling to end unfair aid in the seven-year-old battle.

The United States has threatened sanctions as it claims the EU has not only failed to comply with a WTO ruling against subsidies to Airbus but had even provided it with new aid.

An Airbus spokeswoman told AFP on Saturday the European plane maker did "not expect any change on fundamentals" in the ruling this week.

 

In March last year the WTO partly upheld an EU complaint against US state support for Boeing, saying that billions of dollars in state aid for the aircraft maker amounted to illegal subsidies.

Both the EU and US claimed victory, with Brussels slamming Washington's subsidies, while the United States hailed the WTO for finding that state aid for Boeing was far less than that paid to European rival Airbus.

In a 900-page report, the WTO panel found that "the effects of the NASA and DOD aeronautics R&D  subsidies are significant price suppression, significant lost sales and threat of displacement and impedance of exports from third country markets" in the product category of 200-300 seat wide-body aircraft.

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In all, the WTO found that state aid provided to Boeing reached at least $5.3 billion.

The WTO also found against tax breaks, particularly those given by the US state of Washington as well as on the federal level, saying that these were subsidies. They reached around $2.3 billion.

Airbus, part of the European Aeronautics Defence and Space Company, has claimed that illicit US subsidies caused it $45 billion of lost civil airliner sales between 2001 and 2006.

However, the US government and Boeing claimed a moral victory, saying that the amount of illegal subsidies paid to the US aircraft maker was much less than that paid to Airbus.

A WTO ruling in June 2010 accepted three out of seven claims by Washington that Airbus effectively received illegal export subsidies.

Boeing said that the 2010 ruling faulted $1.5 billion in European R&D subsidies, $1.7 billion in infrastructure subsidies and $2.2 billion in equity injections. It also cited launch aid, which it claimed amounted to $15 billion.

Analysts believe that both sides will eventually be obliged to restructure some state financing and strike an agreement to end the dispute after a lengthy and inconclusive battle.

 

 

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