Boeing 777 – Photo by Masakatsu Ukon
(GENEVA) – The EU won a major victory Monday in its battle over United States support for production of the Boeing 777X, as the WTO ruled the aid breached international trade rules.
The WTO panel report confirms that the US 2013 decision to extend tax breaks for Boeing until the year 2040 goes against previous WTO rulings.
By making these tax breaks depend on the use of domestically produced wings, the WTO says the U.S. also discriminated against foreign suppliers.
The EU Commission has hailed the ruling as an important victory for the EU and its aircraft industry. EU Trade Commissioner Cecilia Malmstroem said: “The panel has found that the additional massive subsidies of USD 5.7 billion provided by Washington State to Boeing are strictly illegal. We expect the US to respect the rules, uphold fair competition, and withdraw these subsidies without any delay,” he said.”
This is the second ruling concerning US subsidies to Boeing. The American measures considered under this case alone amount to USD 5.7 billion, and have now been recognised by the WTO panel as subsidies that are illegal.
This is also the first time in the history of Airbus/Boeing litigation that a WTO panel has found that one of the disputing parties has granted such outright prohibited subsidies that discriminate against foreign producers.
The WTO is expected to issue a report in the spring of 2017 on another long-standing case, which will confirm the extent of the US WTO-incompatible subsidies to Boeing.
WTO panel report regarding US tax breaks for civil aircraft production
