WTO issues preliminary ruling on EU case against subsidies to Boeing

World Trade Organisation handed down its confidential preliminary judgment on the complaint brought by the European Union against alleged US government subsidies to Boeing (Bloomberg/AP, 16-Sep-2010). The EU alleges federal and state tax breaks and research and development support from NASA and the US Department of Defence to Boeing amounts to USD23.7 billion in funding. The WTO issued a ruling on the US case against European government support for EADS/Airbus in Jun-2010. Both the EU and the US have appealed elements of the ruling. Airbus is in favour of bilateral negotiations to settle the issue. Boeing has rejected suggestions that the two cases should be tied together and expects the cases to be resolved through the WTO process.

Airbus: "Airbus is looking forward to seeing the EU case finally moving forward. Only with two reports on the table is there a window for a balanced discussion, which will be the only way out of this destructive and anachronistic dispute," Maggie Bergsma, Spokeswoman. Source: Bloomberg, 16-Sep-2010.

Boeing: "The two cases are completely separate and deal with very specific issues. The WTO ruled very clearly at the end of Jun-2010 that all government money provided to Airbus for development of new aircraft was an illegal subsidy and must stop. That debate is over and it is time for compliance. Should the WTO find against US practices, Boeing is prepared to accept compliance with the ruling," Ted Austell, VP trade policy. Source: Economic Times, 15-Sep-2010.

WilmerHale: "This is not about a new bilateral, it's about WTO discipline. We think the WTO was very clear in saying earlier that financial assistance provided to Airbus was under the rules, illegal. The principal is, they don't provide money on commercial terms," Bob Novick, external counsel for Boeing. Source: Bloomberg, 16-Sep-2010.