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U.S. Prevails in WTO Case on Aircraft Subsidies

Tuesday, June 13, 2017
Sandler, Travis & Rosenberg Trade Report

A World Trade Organization compliance panel has issued a report that according to the Office of the U.S. Trade Representative rejects almost all claims by the European Union that U.S. subsidies to Boeing harmed Airbus’s ability to sell large civil aircraft. The EU challenged 29 U.S. state and federal programs that allegedly conferred $10.4 billion over six years in subsidies to Boeing but the panel found that 28 of the 29 programs were consistent with WTO rules.

The panel did find that one state-level program, which had an average value of $100-110 million during 2013-2015, was inconsistent with WTO rules. According to USTR, these findings are “in sharp contrast” to a September 2016 report issued by another panel in a U.S. dispute concerning the EU’s “launch aid” and other subsidies to Airbus. That panel determined that the EU did not remove aircraft subsidies previously found to be in violation of WTO rules and further violated those rules by granting additional subsidized financing.

The U.S.-EU dispute over government subsidies to competitors Airbus and Boeing has been underway for more than a decade and could last several years more. The most recent panel report will be adopted if either party so requests within 60 days of the report’s circulation, but the EU is expected to appeal the report before it is adopted.

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