Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • EU leaders choose Tusk and Mogherini for top jobs, discuss Russia sanctions

    Read more

  • Dozens of UN peacekeepers still held by Syrian jihadists

    Read more

  • Opposition protesters clash with Pakistani police outside PM's house

    Read more

  • Austerity row overshadows French Socialist’s annual rally

    Read more

  • Egypt sentences Brotherhood leader Badie to life

    Read more

  • Ceasfire allows Gaza families to relax on the beach

    Read more

  • S. Africa condemns 'military coup' in Lesotho

    Read more

  • Kerry calls for 'coalition of nations' to battle IS militants

    Read more

  • Ukrainian plane with seven on board crashes in Algeria

    Read more

  • Exclusive: Fabius warns Russia of more sanctions

    Read more

  • IMF backs Lagarde amid French corruption probe

    Read more

  • Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Suriname leader’s son pleads guilty to courting Hezbollah

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

Business

WTO orders halt to US government's Boeing subsidies

Text by News Wires

Latest update : 2012-03-12

In a final decision Monday, the World Trade Organisation ordered the United States to end subsidies and tax breaks for aviation giant Boeing, ruling that such policies resulted in "significant lost sales" for rival European plane manufacturer Airbus.

AFP - The World Trade Organization ordered Monday the United States to halt unfair subsidies and tax breaks to planemaker Boeing, judging them to have damaged European rival Airbus.

The WTO's Appellate Body said that it found that certain subsidies and tax breaks "caused, through their effects on Boeing's prices, serious prejudice in the form of significant lost sales" to Airbus in the market for civil aircraft with 100-200 seats, according to a summary of the 700-page ruling.

That segment is for the medium-haul Airbus A320 and Boeing 737, which are their top selling aircrafts.

It also found that research and development subsidies also skewed competition for larger aircraft of 200-300 seats, and that such subsidies for the 787 Dreamliner "caused serious prejudice to the interest of the European Communities."

The US has six months to comply with the ruling.

Even before the publication of the WTO ruling, both the European Union and United States claimed victory in the dispute.

The EU had launched the complaint, claiming the United States gave Boeing billions of dollars in illegal subsidies after Washington had disputed EU aid to European aircraft manufacturer Airbus.

In a ruling on March 31, 2011, the WTO partly upheld the EU complaint, but it was appealed.

The European Commission on Monday welcomed the WTO final ruling, saying it confirmed that billions of dollars in US subsidies to Boeing were illegal under WTO rules.

"Today's ruling vindicates the EU's long-held claims that Boeing has received massive US government hand-outs in the past and continues to do so today", said EU Trade Commissioner Karel De Gucht.

The United States took the opposite stand, saying the WTO decision confirmed that Europe's unfair trade subsidies to aircraft maker Airbus have dwarfed US aid to Boeing.

"This decision is a tremendous victory for American manufacturers and workers -- and demonstrates the Obama administration's commitment to ensuring a level playing field for Americans," Ron Kirk, the US Trade Representative, said in a statement before the WTO appeals panel published its findings.

"It is now clear that European subsidies to Airbus are far larger -- by multiples -- and far more distortive than anything that the United States does for Boeing," he said.

The US highlighted that the WTO had found last May in a separate case that the European Union gave Airbus $18 billion (13.7 billion euros) in subsidised funding that resulted in lost market share and sales for Boeing.

"In today's findings, the comparable figures (for Boeing) were between $3 and $4 billion in US subsidies, and lost sales (for Airbus) of just slightly more than 100 aircraft," the statement said.

The European Commission said the WTO appeal ruling found that Boeing received between $5 and $6 billion of illegal subsidies between 1989 and 2006, and was estimated to have received another $3.1 billion since.

Airbus said the WTO ruling found the effects of the illegal funding were much larger.

"The Report confirms the existence of illegal U.S. subsidies to Boeing - previously identified by the WTO as 'at least $5.3 billion' and extended by billions of US dollars as a result of today's decision -- resulting in an estimated loss of approximately $45 billion in sales for Airbus," the company said in a statement.

"The Appellate Body has now spoken in both the Airbus and Boeing cases," said Rainer Ohler, Airbus' Head of Public Affairs and Communications.

"Comparing the core claims made by both sides, the net outcome is clear: Boeing's cash grants are fundamentally illegal, while the system of loans to Airbus by European governments is legal and may continue."

It quipped the Boeing 787 should renamed the "7aid7".

Top level talks might be the only way to end the seven year state-aid dispute between aerospace groups Boeing and Airbus, an EU diplomat said last month after the WTO sent its ruling to companies.

The WTO appeals panel also recognised that the ruling may not end the dispute.

"We realise that, after more than five years of panel proceedings and eleven months of appellate review, a number of issues remain unresolved in this dispute," said the finding.

"Some may consider this not an entirely satisfactory outcome."

Date created : 2012-03-12

  • ECONOMY

    WTO report condemns Boeing subsidies from US government

    Read more

  • AVIATION

    WTO ruling leaves both Airbus and Boeing claiming victory

    Read more

  • AVIATION

    US claims victory after WTO condemns 'illegal' Airbus subsidies

    Read more

COMMENT(S)