European Union failed to stop subsidizing Airbus — WTO

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Those compliance issues represent the only instances where Boeing was negatively affected, according to the European Commission, which praised the appellate body's ruling.

Boeing interprets the WTO ruling to say "the European Union has failed to honour multiple previous rulings and has provided more than US$22 billion of illegal subsidies to European aircraft maker Airbus".

The World Trade Organization (WTO) on Tuesday upheld its decision that the European Union (EU) and four of its member states - France, Germany, Spain and the United Kingdom - failed to comply with an earlier WTO ruling, by maintaining illegal subsidies for aircraft maker Airbus.

"The broader context - of tariffs and unilateral trade measures - is unpleasant and makes this a poorly timed development", said Richard Aboulafia, vice-president of analysis at Teal Group Corp, a consulting firm in Fairfax, Virginia. That would be an escalation at a time when U.S. relations with trading partners are already tense.

The rivals are in fierce competition for plane orders. This is proof of Boeing's cynical PR motives in bringing this case about in the first place.


The WTO has yet to rule on a related case charging that tax breaks by the U.S. state of Washington - where most Boeing manufacturing facilities are located - amounted to an illegal subsidy, the release said.

Tuesday's finding wraps up a case against the EU dating back to 2004 and means the USA can now seek WTO backing to impose sanctions on an as yet unspecified list of European goods.

Since then, the WTO has handed down rulings in favor of both sides. In a statement, he also noted that Boeing would find it hard to prove before the arbitration panel any significant damage from the subsidies granted to Airbus.

Boeing may lose upward of $20 billion in aircraft sales because of the US withdrawal from the nuclear pact.

But EU Trade Commissioner Cecilia Malmstrom also conceded that WTO had put the onus on the bloc to change its subsidies practices regarding Airbus.


"Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated".

A negotiated settlement remains possible, and the same appellate body that ruled on Tuesday must still decide the other half of the dueling claims: allegations that the United States improperly subsidised Boeing. The company added that it plans to eliminate the subsidies that the WTO ruled were unfair.

Airbus said in a statement released after the WTO ruling that it would take steps to ensure the aid complies with the decision, and predicted any eventual sanctions would be minor.

Errol Mendes, a professor of global business law at the University of Ottawa, called the decision a "historic ruling at a historic time".

The Trump administration appeared ready to do just that.


"The result is simple: Airbus pays back its loans, Boeing pays back nothing and continues to exploit the generosity of the US taxpayer", outgoing Airbus CEO Tom Ender said.

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