WTO Rejects Vast Majority of U.S. Claims in Airbus Dispute

The European Commission said it welcomed the report by the Appellate Body in the dispute brought by the U.S. on support to Airbus. The report rejects the vast majority of the U.S. allegations that the EU had not complied with the World Trade Organization (WTO) findings.

The Appellate Body definitively dismissed all U.S. claims that any of the EU support is outright “prohibited” under WTO rules.

Commissioner Cecilia Malmström said: “Today the WTO Appellate Body, the highest WTO court, has definitively rejected the U.S. challenge on the bulk of EU support to Airbus, and agreed that the EU has largely complied with its original findings. Significantly, it dismissed the vast majority of the U.S. claims that this support had damaged Boeing’s aircraft sales. The EU will now take swift action to ensure it is fully in line with the WTO’s final decision in this case. Also, we look forward to the upcoming ruling by the Appellate Body on U.S. compliance with the WTO findings of the massive and persistent government support to Boeing.”

The Appellate Body found that the majority of EU support to Airbus challenged by the U.S. had expired in 2011. It ruled that under WTO rules the EU is not required to take any further action regarding state support that no longer exists, such as the alleged support for the A300, A310, A320 and A330/A340 aircraft models.

This ruling leaves the EU with only a few remaining compliance obligations in order to bring itself fully into line with WTO rules. These are linked to repayable loans provided to the newer A380 and A350 XWB models. There are no obligations that remain regarding single-aisle aircraft.

The Appellate Body also significantly downgraded the assessment of the economic damage that the remaining EU support has allegedly caused to Boeing’s aircraft sales. The U.S. had put forward 218 claims of ‘adverse effects’ – such as lost sales – to Boeing as a result of alleged support to Airbus. The Appellate Body rejected 94% of U.S. claims and only upheld 14 instances where the support had negatively affected Boeing, related only to the support for the A350 XWB and A380.

The original WTO case was initiated in 2004. The U.S. challenged support provided by France, Germany, Spain and the UK to Airbus for the development and production of its series of large civil aircraft programs.

The WTO ruled on the case in 2011, but the U.S. considered that the EU, France, Germany, Spain and the UK had failed to take sufficient steps to withdraw subsidies to Airbus or remove the economic impact of those subsidies on Boeing. The U.S. therefore brought compliance proceedings against the EU which challenged the European efforts. Today’s step marks the end of those compliance proceedings as the Appellate Body is the highest WTO court.

The EU launched a parallel case against U.S. government support for Boeing aircraft in 2005.

Like this story? Begin each business day with news you need to know! Register now for FREE Daily E-News Broadcast and start YOUR day informed!

Leave a comment

View Latest Digital Edition

Terry Mulreany
Subscriptions: 800 708 9373 x130
Susie Angelucci
Advertising: 484.459.3016

View Latest Digital Edition

Visit our sister website for news, information, exclusive articles,
deal tables and more on the asset-based lending, factoring,
and restructuring industries.