WTO delivers verdict on Airbus vs Boeing

(GENEVA) - The World Trade Organization delivered a crucial report Monday on the long-running EU-US battle over subsidies to Boeing and Airbus that the European aircraft maker said vindicated the EU complaint.

But Boeing quickly rejected that conclusion, saying the report was a "sweeping rejection" of the European allegations of illegal subsidies.

The WTO provided its confidential report dealing with Airbus's charges against Boeing to the US and EU governments.

Under WTO rules, the report is supposed to remain private until its public release, expected in a few months.

But both Airbus and Boeing, as well as the EU, were quick to claim victory in the seven-year dispute over multibillion-dollar subsidies.

"We welcome the WTO panel's confirmation of its initial findings regarding the support provided to Boeing by the US government," EU trade spokesman John Clancy said in a statement.

"This solid report sheds further light on the negative consequences for the EU industry of these US subsidies and provides a timely element of balance in this long-running dispute," he added.

The United States criticized the EU for commenting on the report and said it would provide its own "detailed views" on the report when it is publicly released.

"Under WTO rules, the report remains confidential until it is translated and released to all WTO members," Nefeterius McPherson, a spokeswoman for US Trade Representative Ron Kirk, said in an email.

"Despite that the EU has publicly commented on the report, at this time we will simply say that the United States is confident that the WTO will confirm the US view that European subsidies to Airbus dwarf any subsidies that the United States provided to Boeing."

McPherson noted the report would be made public after it has been translated into French and Spanish. "The WTO has not indicated how long this will take, but given the size and complexity of this report, that process could take two or three months," she said.

The report is the latest twist in the subsidies war. A WTO ruling last June partially upheld Washington's parallel complaint against subsidies for Airbus, the France-based aircraft unit of the European Aeronautics Defence and Space Company (EADS).

The Geneva-based trade referee is already hearing an appeal by both sides against the June ruling.

Airbus said the latest WTO report backed its allegations and estimated it has lost at least $45 billion in sales due to the illegal aid.

"Today's World Trade Organization decision confirms Boeing has received massive and illegal government subsidies for many decades, and they have had a significant and ongoing negative effect on European industry," Airbus said.

While not giving the details of the ruling, the European Commission said the probe found that Boeing's receipt of research and development funding from US government bodies had had "negative consequences" for Airbus.

"Airbus applauds the excellent result achieved by the European Commission and the member states," said Rainer Ohler, Airbus's head of public affairs.

"From today, Boeing can no longer pretend that it doesn't benefit from generous and illegal state subsidies. It has been doing so from the start and it's time to stop the denial," he said.

"The myth that Boeing doesn't receive government aid is over and we hope this sets the tone for balanced and productive negotiations going forward."

Boeing countered that the WTO had issued a "sweeping rejection" of European Union claims it had received illegal subsidies.

"Today's reports confirm the interim news from last September that the WTO rejected almost all of Europe's claims against the United States, including the vast majority of its R&D (research and development) claims -- except for some $2.6 billion," Boeing said in a statement.

"This represents a sweeping rejection of the EU's claims."

"Nothing in today's reports even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received," Boeing said.

"The WTO's decisions confirm that European launch aid stands alone as a massive illegal subsidy only available to Airbus, which has seriously harmed Boeing, distorted competition in the aerospace industry for decades, and resulted in the loss of tens of thousands of good-paying US jobs," the Chicago-based aerospace and defense giant said.