The World Trade Organization (WTO) said Thursday the European Union’s so-called “launch aid” loans provided for the development of Airbus fleets had been a “genuine and substantial” cause of significant lost sales for its USA competitor Boeing.
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The WTO is yet to rule on a similar European Union complaint that Boeing benefits from billions of dollars in tax breaks.
The loans were a “genuine and substantial” cause of significant lost sales for competitor Boeing, it said.
“The public-private partnership model is a victor: a win for state investors who reap rewards in addition to full repayment of loans, and a victor on compliance at the WTO”, said an Airbus spokewoman.
“Rather than comply with their WTO obligations to remedy the $17 billion in past subsidies provided to Airbus, the WTO found that EU Member States provided Airbus with new illegal launch aid-reportedly nearly $5 billionso they could launch the new A350”, said Boeing in a statement.
The two sides settled a previous dispute over subsidies in 1992, but the USA walked away from that deal in 2004, arguing Airbus had an unfair advantage. The principal subsidies covered by the ruling include launch aid for the development of virtually all Airbus’s airliner projects and certain equity infusions by France, Germany, Spain and the UK.
In assessing the competitive harm done, the report said Boeing lost orders for at least 50 aircraft as a result of the A350 launch aid.
“We call on them to end subsidized financing of Airbus immediately”, Froman said in a statement.
However Austell said if the A380 is terminated, Airbus’s ability to walk away from its launch aid loans on that program without fully repaying them is an unacceptable advantage.
Before fines are imposed, the European Union can appeal the latest finding in a process that is likely to take at least three months.
The EU can still appeal the latest decision.
However, the ruling brings the WTO one step closer to authorizing the U.S.to take countermeasures – potentially imposing billions of dollars in tariffs on goods or services from the EU. One similar proceeding regarding the compliance of the U.S. with the previous WTO ruling concerning Boeing (DS 353) and an additional case on massive subsidies to Boeing from the State of Washington (DS 487).
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The WTO has also issued rulings over the years saying that Boeing was the recipient of banned federal and state support.
