On 28 March 2019, the World Trade Organisation (WTO) Appellate Body confirmed the EU’s long held position that the United States has taken no steps to comply with WTO rules on support to Boeing, marking the final step inthe compliance proceedings launched 7 years ago.
In 2012, the WTO recognisedthe existence of the illegal subsidies granted by the United States to Boeingbetween 1989 and 2006, amounting to over 5 billion dollars, which allowed the company to sell its aircraft more cheaply, to the detriment ofits European competitor Airbus. In June 2017, the WTO confirmed that the United States did not take any appropriate action to comply with its obligation to withdraw subsidies declared illegal by WTO itself.
The recent ruling acknowledged the European Union’s position that several US measures, notably the Washington State tax programme and business incentives from South Carolina, are in fact subsidies through which the United States continued to illegally subsidy the company, despite the fact that the support measures had already been qualified as prohibited. Prohibited subsidies are considered the most trade distortive category of subsidies and are illegal under WTO rules. US subsidies to Boeing caused severe damage to Airbus’ market opportunities, notably in the form of lost sales.
Commissioner for Trade Cecilia Malmström said that the “…ruling is a welcome one for the EU, its aircraft-producing industry and workers across EU Member States in this strategic sector…”, adding that the EU “… will continue to defend a level-playing field for our industry…”.
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