Boeing and Airbus Still at Loggerheads over WTO Rulings

 - September 24, 2010, 9:59 AM
The World Trade Organization’s interim report on Airbus’s allegations of unfair subsidies given by the U.S. government to Boeing covers programs including the new 787 Dreamliner, but the WTO won’t make the ruling public for several more months. (Mark Wagner)

Lawyers and lobbyists on both sides of the Atlantic have launched into a fresh wave of hostilities following the World Trade Organization’s September 15 interim ruling on Airbus complaints about alleged unfair state subsidies Boeing received for programs including the new 787 Dreamliner. The content of the ruling will remain officially secret until the WTO publishes a final report several months from now, but that hasn’t stopped the protagonists from arguing over decisions that haven’t yet entered public domain, making it hard for outsiders to form their own judgments.

Airbus, still smarting from a WTO subsidy ruling last June that found against it on several–but not all–counts, has claimed victory in its counter-offensive against Boeing. Reports in the financial press have claimed that the WTO has accepted complaints covering up to $23 billion of $24 billion in alleged subsidies that the European Union argued Boeing received by various arms of the U.S. government, including NASA and the Pentagon. But U.S. government officials quickly dismissed the claims as inaccurate. Boeing itself didn’t even wait until the WTO formally issued its interim ruling, opting to get its retaliation in first. Essentially, Boeing argued that whatever the WTO says the U.S. side has done is nothing like as bad, or on the same scale, as what the Europeans have done in terms of distorting the market with launch aid for programs such as the A380.

Meanwhile, Airbus is appealing the June 2010 ruling against it and so is Boeing, which is disputing some of the WTO’s findings in Airbus’s favor. When the WTO finally publishes its final report on Airbus’s complaints against Boeing, probably some time early next year, it seems highly likely that a fresh wave of spin and legal appeals will be unleashed. Maybe senior Airbus spokesman Rainer Ohler had that in mind when he called for the two sides to abandon the legal battle and start renegotiating forward-looking agreements on government aid for aerospace.