WTO Rules in Favor of Boeing in Trade Spat with EU and Airbus Subsidies

©Airbus, JV Reymondon

The World Trade Organization (WTO) has ruled that despite requests, the European Union (EU) has failed to stop all subsidies to Airbus, the result of which has seen the U.S threaten sanctions against European products until the EU stops “harming U.S. interests.”

According to Reuters, “The WTO said the EU had failed to remove support in the form of preferential government loans for the world’s largest airliner, the A380, and Europe’s newest long-haul plane, the A350, causing losses for Boeing and U.S. aerospace workers.”

However, the Geneva-headquartered WTO threw out U.S. claims that loans for Airbus’s most popular models, the A320 and A330, were costing Boeing significant sales.

There are currently mounting tensions between the U.S and Europe over U.S. aluminum and steel tariffs, together with fallout expected after America’s withdrawal from the Iran nuclear pact. Boeing estimates the tariffs could involve billions of dollars a year, beginning as early as 2019.

Tuesday’s finding draws to a close the case against the EU which dates as far back as 2004, consequently meaning that the U.S. can now turn to the WTO to back the imposition of sanctions on a list of as-yet-unknown European goods.
It should also be noted that the WTO is close to completing a similar and drawn-out case against subsidies for Boeing. Airbus has confirmed that such retaliation could spark EU sanctions against the United States.

“Today’s report is really only half the story,” said Airbus Chief Executive Tom Enders.
It is anticipated both sides will look for billions of dollars in annually-paid sanctions, though the actual amounts will depend on arbitration, the results of which are unlikely to be provided for at least a year.

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