Wto confirms: boeing continued to receive illegal subsidies

Wto confirms: boeing continued to receive illegal subsidies

In the dispute over illegal boeing subsidies, the u.S. Lost at the last instance before the world trade organization (wto).

The U.S. Government has not withdrawn all of the favors to the U.S. Aircraft manufacturer that were already deemed illegal in 2011 and 2012, as requested, the WTO appellate body ruled. The european boeing competitor airbus has "lost significant sales" as a result, but it has not been possible to determine the extent of the damage, the panel said.

The ruling clears the way for retaliatory measures on the part of the european union, which initiated the case 15 years ago. The high price will be decided by a WTO arbitrator. Airbus expects to spend billions on the project. At the same time, however, there are billion-dollar claims pending before the WTO from the americans, who prevailed in a lawsuit against the EU over illegal airbus subsidies in 2018. The USA has applied for penalties amounting to eleven billion dollars a year, as the office of the US trade representative has just announced. Here, too, the WTO arbitrator decides.

All sides chalked up the WTO ruling as a victory for themselves. "Today’s decision is welcome for the EU, but also for its aircraft industry and employees," said EU trade commissioner cecilia malmstrom. The eu commission pointed out that the "massive and trade-distorting subsidies" granted by the u.S. Had caused considerable damage to airbus – mainly by depriving it of sales, because boeing was able to offer its aircraft at a lower price due to the subsidies. WTO has rejected most EU allegations, US government says. In contrast, the ruling on the airbus subsidies had been much harsher.

Airbus spoke of a "rough victory. "This is a clear victory for the EU and airbus. It reinforces our position that although boeing is pointing fingers at airbus, it has not taken any action to comply with its WTO obligations, unlike airbus and the EU," said airbus chief legal officer john harrison, according to the release. Boeing, on the other hand, took the position that only a tax break from the state of washington worth 325 million dollars was still classified as illegal. The group will support the government in coming into line with the WTO ruling.

The boeing case concerns, among other things, tax and other favors in the U.S. States of washington and south carolina that violate WTO rules. Boeing benefited so much from the washington corporate tax cut that it was able to compete with airbus for contracts in dubai, canada and iceland in 2013 and 2014 by offering cheaper prices, thus hurting its european rival.

The german government’s aviation coordinator, thomas jarzombek, urged the eu and the u.S. To work together. "We are counting on reaching this common understanding through negotiations and thus making WTO procedures obsolete in the future," he said.

The WTO also ruled in favor of the EU on several other issues, and in a different way than in a ruling two years ago. For example, government support for research and development has accelerated the completion of the boeing 787 dreamliner. Nor does the EU have to demonstrate that certain subsidies to boeing actually led to price reductions at boeing and prove that the subsidies caused harm to airbus.

For boeing, this is another blow after the two boeing 737 max 8 plane crashes that killed a combined 346 people. Indonesia’s state-owned airline garuda is therefore already planning to cancel an order for 49 boeing 737 max aircraft. The WTO ruling affects boeing in that government subsidies received so far must now be terminated. But it does not entail any repayments of subsidies received or penalties for the company. Retaliatory take-downs allowed by the wto are usually punitive tariffs between the parties to the lawsuit. You should refer to the industry concerned, but that is not mandatory.

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