WTO Boeing decision imminent

Posted on 16 Sep 2010 by The Manufacturer

The World Trade Organisation will rule today whether grants received by Boeing from the US government broke anti-competition rules.

The decision will form the latest development in a six year old saga which has seen both the US and the European Union bring cases to the WTO in respect of one another’s financial assistance of their respective main aerospace interests.

In June, the WTO ruled that money received by Airbus from European Union members for the launch of the A380 model must be repaid or a commercial finance deal be put in place.

Boeing released a statement this morning in anticipation of the decision in which it stated it was looking forward to the decision before going on to attack Airbus, claiming the European misdemeanours were worse and may be ongoing, despite the WTO’s ruling.

“We look forward to learning how the WTO has 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,” read the US company’s statement. “In June, the WTO held in a case against the EU that Airbus had received illegal subsidies totalling more than $20 billion in principle. Launch aid, which represented the lion’s share of the involved illegal aid (roughly $15 billion), is unique to Airbus, unparalleled within US industry, and – as the WTO has confirmed – harmful to U.S. aerospace interests and the American worker.

“To date, Airbus and its government sponsors have defiantly resisted abandoning launch aid. Media reports indicate that plans remain in place to provide billions of Euros of launch aid for the A350, a product that will compete with the Boeing 777 and 787. Unless that money is provided on full commercial terms, that would be an incomprehensible step in light of the recent ruling against launch aid and the outstanding obligation under WTO rules that Airbus repay the $4 billion in illegal launch aid it received for the A380, or restructure the A380’s financing to proven commercial terms.

“We have full confidence in WTO processes and its dispute-resolution procedures. The U.S. government’s actions in remedying European concerns with FSC/ETI last decade demonstrate its approach to obligations under WTO findings. Likewise, we fully expect Airbus/EADS and the EU to act in the same way, making good on their end of the WTO bargain.”

Airbus is appealing the WTO’s ruling against it in Brussels. Ministers from Britain, France, Germany and Spain have stated that the countries intend to continue providing reimbursable subsidies to help Airbus continue to develop its wide bodied A350 project, a direct competitor of the Boeing 787 Dreamliner, despite the ruling.