Boeing, US welcome WTO report slamming EU’s Airbus loans

Airbus received nearly US$22 billion in subsidised financing from the EU and European countries, according to US trade representatives

PUBLISHED : Friday, 23 September, 2016, 12:02pm
UPDATED : Friday, 23 September, 2016, 12:02pm

The US government and Boeing have welcomed a World Trade Organisation (WTO) report that revealed how the European Union (EU) failed to stop unfair government subsidies to French plane-maker Airbus despite previous rulings by the global trade body.

The WTO also found Airbus received new illegal subsidies for the A350, which are reported to be nearly US$5 billion.

In 2011, the WTO outlined specific steps for the EU to withdraw government financial support for Airbus, which included subsidy programmes, that European states claimed were “launch aid” for the plane-maker to bring its products to market.

Not only did the EU ignore the 2011 measures, the regional bloc further breached rules by granting over US$4 billion in new subsidised financing for the Airbus A350 XWB, the US Trade Representatives’ (USTR) office declared in a statement on Thursday.

In total, Airbus has received nearly US$22 billion in subsidised financing from the EU as well as Germany, France, the United Kingdom and Spain, the USTR claimed.

“This report is a sweeping victory for the US and its aerospace workers,” the USTR’s Michael Froman said in a statement. “We have long maintained that EU aircraft subsidies have cost American companies tens of billions of dollars in lost revenue, which this report clearly proves.”

For over a decade, Washington and the EU have fought over the issue of subsidies, with the latter asserting that Illinois-based Boeing benefited from billions in US tax breaks.

Airbus pledged to appeal Thursday’s decision while European officials hinted of an appeal as well, Reuters reported.

“The historic ruling finally holds the EU and Airbus to account for their flouting of global trade rules,” said Boeing CEO Dennis Muilenburg in a statement on Thursday.

Thursday’s decision sets the stage for the US to seek up to US$10 billion in annual retaliatory tariffs on EU imports, Boeing noted.

The WTO is expected to rule on the EU’s case against Boeing early next year, according to Reuters.

In its statement, Boeing stressed that the Airbus case was independent of EU’s accusations against Boeing, claiming that the cases were “separate and distinct.”

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