WTO report on European Union’s Airbus Loans Welcomed by Boeing and US

A recent WTO report on the European Union has made the U.S. government and Boeing happy.

The WTO report has allegedly 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 which the U.S. government and Boeing have welcomed heartedly.

Reported to be nearly $5 billion, allegations that Airbus received new illegal subsidies for the A350 was found to be true by the WTO.

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

The U.S. Trade Representative’s (USTR) office declared in a statement on Thursday that the regional bloc further breached rules by granting over $4 billion in new subsidized financing for the Airbus A350 XWB, apart from the fact that the EU allegedly ignored the 2011 measures.

The USTR claimed that in addition to Germany, France, the United Kingdom and Spain, Airbus has received nearly $22 billion in total in subsidized financing from the EU.

“This report is a sweeping victory for the U.S. and its aerospace workers. 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,” the USTR’s Michael Froman said in a statement.

With the EU asserting that Illinois-based Boeing benefited from billions in U.S. tax breaks, Washington and the EU have fought over the issue of subsidies for over a decade.

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

“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.

Boeing noted that the stage for the U.S. to seek up to $10 billion in annual retaliatory tariffs on EU imports was set after Thursday’s decision.

According to Reuters, the WTO is expected to rule on the EU’s case against Boeing early next year. Slaiming that the cases were “separate and distinct”, Boeing stressed that the Airbus case was independent of EU’s accusations against Boeing, the company said in a statement.

(Adapted from CNBC)

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