The World Trade Organization has ruled that Boeing did receive subsidies “inconsistent” with the Subsidies and Countervailing Measures Agreement, but not nearly as much as had been claimed by Europe on behalf of Airbus.
European countries had complained that Airbus had suffered because of payments and/or incentives to Boeing amounting to $19.1 billion between 1989 and 2006.
The States of Washington, Kansas and Illinois were accused of providing various tax and non-tax incentives in connection with the location of Boeing facilities, and the Departments of Commerce and Defense were alleged to have made payments to Boeing and given the company access to government facilities, equipment and employees.
Also under investigation were payments made to Boeing by the National Aeronautics and Space Administration (NASA), as well as the provision of equipment and employees. The EU alleged that NASA was responsible for over $10 billion worth of the $19.1 billion subsidies in its complaint.
The WTO report agreed with some, but by no means all, the European allegations, concluding that $5.3 billion had been given to Boeing in contravention of the SCM Agreement.
To the extent that the subsidies caused adverse effects to Airbus, the WTO panel “recommended” that the US take appropriate steps to remove the adverse effects or withdraw $2.7 billion of the subsidies.
Despite the ruling, Boeing has emerged from WTO investigations smelling fresher than Airbus. The WTO ruled last year that Airbus had received $20 billion in illegal subsidies after a US complaint against the European aircraft manufacturer.
"The WTO has vindicated the view the United States has taken for the last 20 years—that the subsidies the Europeans give to Airbus dwarf anything that the US government does for Boeing," said US trade envoy Ron Kirk at a news conference in Washington.
"This WTO ruling shatters the convenient myth that European governments must illegally subsidize Airbus to counter US government assistance to Boeing," said J. Michael Luttig, Boeing's executive vice president and general counsel, in a statement.
"The ruling rejects 80 percent of the EU's claims against the US, finding no more than $2.7 billion of impermissible subsidies to Boeing not previously remedied," he added.
