Boeing flying high after WTO reverses ruling in subsidies dispute

Geneva - Subsidies given by the U.S. state of Washington to Boeing are legal, a World Trade Organization (WTO) appeals body said Monday, partially overturning a victory by rival Airbus and the European Union previous year. The appellate body isn't making a recommendation in the dispute, it said Monday in a statement.

"Airbus has a long history of putting European taxpayer money at risk through the unsecured loans that created and continue to sustain the company", he said.

The original ruling from the WTO proclaimed that Boeing received tax breaks for manufacturing purposes at its Washington state facility. But, today, the earlier verdict was overturned.

Boeing still seeks and gets government incentives to locate work, most notably the 777X incentive package from Washington state, the biggest corporate tax break any state has ever granted. In the Airbus case (DS 316) the appeal proceedings are also underway, and the report by the Appellate Body on European Union compliance is expected early 2018.

The decision effectively ends one of three WTO cases arising from government support of Airbus or Boeing. That case is still in its compliance phase and has separately determined the subsidies to be "actionable", a lesser but still illegal transgression of WTO rules, Airbus said in a statement.

Airbus, which estimates it has lost $100bn in sales because of Boeing subsidies, said: "Boeing illegal subsidies are still illegal and need to be removed".

However, Airbus said ‎"the "game" is far from over" as other complaints over alleged aid are still to be resolved.

The appellate body is expected to rule later this year on a 2016 finding that the European Union failed to remedy some of the incentives to Airbus deemed illegal in 2011 and that the bloc compounded the issue with below-market loans for the planemaker's new A350 jetliner.

If the decision is upheld, the USA would be able to sue for compensation as a result. The EU has appealed and disputes USA claims of $22 billion in damages. Brussels and Washington have two larger cases pending at the WTO, centred on multiple claims and counter-claims about illegal subsidies for their respective aviation industries.



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