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EU Seeks WTO Consultations with U.S. over Subsidies to Boeing

Tuesday, December 23, 2014
Sandler, Travis & Rosenberg Trade Report

The European Union announced Dec. 19 that it has submitted a request to the World Trade Organization seeking consultations with the United States over a decision by Washington state to extend from 2024 through the end of 2040 certain subsidies provided to Boeing and other aerospace companies worth an estimated $8.7 billion. The EU claims that these subsidies, the largest ever provided by the U.S. to its civil aerospace industry, are prohibited under the WTO Subsidies and Countervailing Measures Agreement because they require the beneficiary to use domestic goods rather than imported ones. The EU adds that in 2012 the WTO found that tax subsidies provided by Washington state to Boeing, which were supposed to expire in 2024, did not comply with multilateral requirements.

Since October 2004 the U.S. and the EU have been immersed in a quarrel over their governments’ support to their respective aerospace industries. This seemingly endless litigation has yielded several WTO rulings as well as extensive compliance efforts.

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