EU launches fresh claims regarding Boeing tax breaks

Posted on 22 Dec 2014 by Tim Brown

The European Union launched fresh claims on Friday with the World Trade Organisation over what it believes are illegal tax breaks provided to Boeing by its home state of Washington.

In a continuation of a decade long disagreement over subsidies, the EU said the Pacific coast state, historically the base for nearly all Boeing’s plane manufacturing, broke global trade rules by offering Boeing tax incentives to persuade the company to manufacture its latest model, the 777X, there.

But the US Trade Representative’s (USTR) office was quick to respond and said that the claims “lack[ed] any foundation,” and showed the European Union is not serious about resolving the long-running dispute.

“In addition, the EU’s filing of yet another complaint, before the panel in the ongoing compliance proceeding has even released its decision, is another example that they are not serious about moving toward a constructive resolution,” said USTR Chief Counsel Tim Reif in an emailed statement. “When the EU is ready to resolve this dispute on the basis of WTO rules, rather than just dragging it out, they will find us ready.”

A Boeing spokesman said described the new claims as a diversion from “massive amounts of illegal launch aid” paid to Airbus.

The EU and United States have yet to resolve two existing claims regarding accusations of ‘illegal’ Boeing tax breaks and alleged subsidies received by its European rival Airbus.

The latest manoeuvres could deepen the bitter industrial contest as the 406-seat Boeing 777X, an expanded version of its profitable 777, competes with Europe’s upcoming A350-1000.

Under WTO rules, the United States has 60 days to try to deal with the EU’s concerns in bilateral talks. After that, the EU could ask the WTO to set up an adjudication panel.