U.S. wins WTO compliance dispute over EU’s Airbus subsidies

The World Trade Organization ruled in favor of the United States in a long, drawn out dispute with the European Union and four of its member countries over subsidies to aircraft manufacturer Airbus.

   The World Trade Organization (WTO) ruled in favor of the United States in a long, drawn out dispute with the European Union and four of its member countries over subsidies to aircraft manufacturer Airbus.
   In June 2011, the WTO determined the EU gave more than $18 billion in subsidized financing to Airbus, and that European “launch aid” helped Airbus manufacture every model of its large civil aircraft. In December 2011, the EU claimed to be in compliance with the WTO in the case, but the United States disagreed and requested a compliance panel to address the issue.
   The United States pointed out to the global trade body that the EU gave another $4 billion in new subsidies to finance the launch of the A350 XWB, which it said caused “tens of billions of dollars in adverse effects on the U.S. industry.”
   The WTO compliance panel found that since 2006, EU subsidies for the Airbus A320 development resulted in the displacement or impedance of Boeing 737s in the EU, Australia, China and India, as well as lost sales of 271 B737s.
   Similarly, for Boeing’s 767, 777 and 787 planes, the panel found the EU subsidies benefited the Airbus A330, A340 and A350 XWB aircraft, impeding Boeing sales of its equivalent-size planes in the European Union, China, South Korea and Singapore, as well as lost sales of 50 Boeing aircraft.
   Lastly, for Boeing’s largest planes – the 747s – the WTO compliance found that EU subsidies benefited the Airbus A380’s production and sales, causing the loss of 54 B747 sales across the European Union, Australia, China, South Korea, Singapore and the United Arab Emirates.
   “This is a huge victory for Northwest aerospace workers who have been building world-class airplanes for years,” said Sen. Maria Cantwell, D-Wash., in a statement. “With this decisive ruling, it is now time for the EU to come to the table and settle, rather than waiting for future tariffs. Without having to compete against illegal, market-distorting practices, Boeing should win more sales around the world.”