Release of WTO Ruling Brings Scant Resolution to Boeing-Airbus Dispute

 - March 23, 2010, 12:23 PM

The World Trade Organization has finally passed judgment on the legitimacy of more than $200 billion in European loans to Airbus for six separate aircraft programs. But, still, the outcome remains somewhat ambiguous, as Airbus and Boeing each claimed some measure of victory in the now six-year-old dispute.

The 1,000-page report, details of which will remain confidential until the WTO publishes a copy for public consumption later this spring, elicited a statement from Airbus this morning noting that the trade body rejected 70 percent of the claims brought by the U.S. The Airbus statement also said that the WTO rejected specific attempts to include the A350 in the ruling, and that the panel refused U.S. requests for remedies as inappropriate.

Assistant U.S. trade representative Carol Guthrie told AIN, however, that the dispute directly addresses only subsidies the U.S. identified in its panel request in 2005. “Therefore one would not expect the commitments of launch aid to the A350 announced last summer and in recent days to be addressed explicitly in the final report, which remains confidential in any case,” she said. “Certainly reasoning and conclusions in the final report could be expected to be relevant to the WTO-consistency of launch aid for the A350.”

Meanwhile, Airbus said it expects the WTO to issue a separate report on Boeing subsidies in June. “Boeing’s recent WTO enthusiasm is unlikely to survive WTO confirmation that the 787 is the most highly subsidized aircraft program in the history of aviation,” said Airbus in its statement.

Boeing this afternoon issued a statement trumpeting the WTO ruling as “a powerful, landmark judgment and good news for aerospace workers across America who for decades have had to compete against a heavily subsidized Airbus.

“U.S. officials have estimated the commercial value to Airbus of all the government launch aid subsidies it has received at more than $178 billion (in 2006 dollars),” said Boeing. “Government subsidies have been used to support the creation of every Airbus product, including the A330/A340, which received more than $5 billion in development aid, and the A380, which received $4 billion in subsidies. Those and other European government subsidies to Airbus have significantly distorted the global market for large commercial airplanes, causing adverse effect to Boeing and costing America tens of thousands of high-tech jobs.”  

Airbus, for its part, said it expects the WTO conflict to drag on for “at least a few more years.

“As in all other trade conflicts, resolution will finally be found only in trans-atlantic negotiations,” it said. “Boeing’s repeated rejection of European offers for negotiation over [the] years and again last night usurp[s] the proper role of the U.S. Government and contradict[s] the U.S. transatlantic partnership with European nations.”