WTO to referee Boeing, Airbus dispute
The Geneva-based World Trade Organization Wednesday set up two panels to investigate state aid received by large aircraft manufacturers Boeing and Airbus, Reuters reported.
The WTO was compelled to investigate following two requests each by the European Union and the United States.
In the last few years Airbus has overtaken Boeing as the world’s largest aircraft manufacturer, and has recently started testing on its A380 super jumbo jet. Last year the U.S. government called upon European governments to cease providing launch aid to Airbus, arguing that it is now an established company that no longer requires state aid for research, development and marketing.
The EU counterclaimed, insisting that tax exemptions and other favors received by Boeing are worth more than $7 billion, not including federal billions of research and development grants from the federal government for space and defense projects that have applications for production of its new 787 aircraft.
The EU said its assistance to Airbus was legal under international trade rules because Airbus receives loans that must be repaid while subsidies to Boeing are grants, with no obligation to repay.
According to Reuters, any guilty verdict could entitle one of the manufacturers to impose sanctions, potentially more than $4 billion annually, on the other company.