20 MayWTO affirms ruling on Airbus
Earlier this week, the World Trade Organization’s Appellate Body confirmed a landmark decision that Airbus received $18 billion in illegal “launch aid” as well as other subsidies from European government. These subsidies must end, affirms the WTO.
The verdict is final, says Boeing Executive Vice President and General Counsel J. Michael Luttig. He spoke in a press release from Boeing. Europe must comply with the ruling within 6 months, he said.
“This is a clear, final win for fair trade that will level the playing field for America’s aerospace workers,” Jim McNerney, Boeing chairman, president and chief executive officer, was quoted as saying in the release.
“The WTO has concluded that launch aid and other illegal Airbus subsidies distorted the market, harmed U.S. industry and now must end,” McNerney said.
“Europe must end all practices held illegal by today’s decision—particularly launch aid,” Luttig said.
That includes “government loans for the A350 and future products must be on proven commercial terms,” he said
According to Reuters, the WTO judges did agree that government loans intended to help Airbus develop its A380, did not break a ban on export subsidies- the most severe category of market-distorting aid.
Both sides- Airbus and Boeing- are claiming a victory after the WTO report was issued. According to Reuters, the issue has become “the world’s largest trade dispute, affecting over 100,000 aerospace industry jobs.”
Both companies continue to disagree, however, on the effect the report will have on Airbus A350, being developed to compete with the 787 Dreamliner.
The ruling by the WTO sets governing standards for the global aerospace industry, says Boeing. It also helps to ensure a level playing field for all companies and workers.
According to Reuters, Airbus Chief Executive Tom Enders said Airbus could and would continue to partner with governments as it builds its planes. “A clear signal that it will press on with efforts to negotiate A350 government loans which analysts estimate at $5 billion.”
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