Although Pleased with Outcome, EU Appeals WTO Decision on Illegal Subsidies for Boeing
April 5, 2011 in WTO Reporter
GENEVA—The European Union announced April 1 that it was appealing a World Trade Organization panel ruling on the EU’s complaint against illegal subsidies for the U.S. aircraft manufacturer Boeing—for strategic reasons.
A day earlier, the panel published its ruling that the United States provided illegal subsidies to Boeing, which led to “significant” lost sales and depressed sales prices for Boeing’s European rival Airbus. Under WTO rules, the United States has five days to file its own appeal, if it so chooses.
“The EU’s victory in this case against Boeing remains very clear for all to see,” EU trade spokesman John Clancy said. “However, the EU has chosen to quickly appeal technical elements of the ruling for legal strategic reasons—including to reduce what has been a growing time gap between the two parallel aircraft disputes.”
Separate Appeals
The WTO’s Appellate Body is expected to issue a ruling by the end of April on appeals filed by the United States and the EU against a separate WTO panel ruling which found that EU member states had illegally subsidized Airbus, mainly by providing so-called “launch aid” loans for the development of new aircraft.
The panel ruling on the U.S. complaint against Airbus was made public on June 30.
The EU is asking the WTO’s Appellate Body to overturn the panel’s finding that tax breaks offered by the state of Washington and the city of Everett, Wash., through its “Business and Occupation” (B&O) tax reductions and tax credits did not constitute a “prohibited” export subsidy.
The panel found that the B&O tax breaks constituted an actionable subsidy which had caused serious prejudice to the EU and Airbus in the global market for 100-200 seat single aisle passenger jets and 300-400 seat wide-body passenger jets…