Boeing may Win WTO Case Against $18bn Airbus Subsidies

The WTO’s highest court ruled on 29 February in the high-profile trade spat between Brussels and Washington over subsidies provided to US aircraft manufacturer Boeing, sources close to the case told news agency AFP. The ruling - submitted confidentially to the two parties - is the latest stage in a seven-year row that has seen both sides accuse each other of illegally subsidising their respective passenger plane producers.

Though the results of the Appellate Body ruling remain private, tensions between the two sides’ respective aircraft giants - Boeing in the US and Airbus in the EU - have recently been playing out in the public sphere in anticipation of the result.

This past Monday 27 February, Boeing rebuffed recent suggestions from the EU and rival producer Airbus that the differences between the two sides could be resolved in negotiations without preconditions.

The European Union and United States have long fought over their government support to their domestic aircraft producers, with the disagreement playing out in twin cases at the WTO.

Wednesday’s expected Appellate Body decision stems from a WTO panel ruling in March 2011 that Boeing had received US$5.3 billion in illegal support from Washington (DS353).

Though the EU declared the panel ruling a victory, Brussels quickly appealed the decision in order to clarify certain points of law and thus close a time gap between this case and the mirroring case brought by Washington against Brussels’ aid to Airbus.

For its part, Washington had mounted its own challenge to EU’s support of its flagship manufacturer, Airbus (DS316). In May 2011, the Appellate Body determined that EU member states were at fault for US$18 billion in support to Airbus.

The US is now seeking confirmation from the global trade arbiter that the EU has not complied with the ruling in the Airbus case, and is also requesting WTO authorisation to impose hefty countermeasures.

The trade war between the US and EU over subsidies to aerospace giants Airbus and Boeing is the world’s largest trade dispute, affecting a market worth more than US$2 trillion.