13-Mar-2012 11:16 AM

WTO confirms Boeing received 'billions' in illegal subsidies from the US

European Commission (EC) welcomed (12-Mar-2012) the World Trade Organization (WTO) appellate body ruling in the European case against US subsidies for Boeing. The Commission said the ruling confirms "billions of dollars in US subsidies granted to Boeing are illegal under WTO rules", finding US federal/state governments granted USD5-6 billion in WTO-incompatible subsidies between 1989 and 2006. The Commission estimates subsidies granted after this date are at least USD3.1 billion. The EU now expects the US to fully comply with this ruling and to implement the findings and obligations by "withdrawing these injurious subsidies or their adverse effects". The Commission said the appellate body confirmed several of the key findings of the earlier WTO panel report that certain subsides to Boeing have damaged the interests of the EU and Airbus, notably:

  • R&D funding granted by NASA of USD2.6 billion;
  • R&D funding granted by the US Department of Defense of up to USD1.2 billion;
  • Foreign Sales Corporation export subsidies of USD2.2 billion;
  • Washington State tax breaks to a value of close to USD3.1 billion for the period 2006-2024.

The appellate body also found USD476 million in subsidies granted by the City of Wichita are also causing adverse effects. [more - original PR]

European Commission: "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. The costs to EU industry from these long-term subsidies run into billions of euro. This landmark ruling clearly shows the US has used an unlawful way of supporting business that has stood in the way of fair competition. The US should now put an end to such harmful subsidies," Karel De Gucht, EU Trade Commissioner. Source: Company statement, 12-Mar-2012.

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