ibusinesslines.com
ibusinesslines.com August 18, 2018


Boeing: WTO Ruling Could Lead To Biggest Retaliatory Tariffs Ever

16 May 2018, 02:30 | Erica Roy

Watch video 01:10 Back from the brink Emirates order rescues Airbus jet

Watch video 01:10  Back from the brink Emirates order rescues Airbus jet

The World Trade Organization ruled on Tuesday the European Union had ignored requests to halt all subsidies to plane maker Airbus, prompting the United States to threaten sanctions against European products unless the EU stops "harming USA interests".

European Trade Commissioner Cecilia Malmstroem said that the ruling rejected "the vast majority" of claims by the United States and Boeing.

The WTO dismissed an appeal by Airbus saying, the European plane maker had failed to fix the harm done to Boeing.

Shares of Airbus reversed earlier gains to trade down as much as 1.8 per cent immediately after the ruling was published.

"This landmark ruling by the WTO Appellate Body is the final decision in this case, which was initiated in 2006", the release said.

The appellate body maintained an earlier WTO ruling that European Union "launch aid" provided to Airbus had resulted in lost sales for Boeing in the twin-aisle and very-large aircraft markets.

The EU's Executive Commission said most of the aid faulted in earlier rounds of the long-running case had expired in 2011 and that it would swiftly comply on the remaining measures.


Mr. Enders of Airbus ratcheted up his rhetoric, accusing Boeing of relying on a "Washington state corporate welfare scheme" and insisting that the latest ruling was "only half the story - the other half coming out later this year will rule strongly on Boeing's subsidies and we'll see then where the balance lies".

The WTO case has yielded 5,000 pages of filings and cost tens of millions of dollars.

Bob Novick, a legal counsel for Boeing, told reporters that the subsidies led to lost sales and that the United States will be free to decide over the next several months what European products will be targeted for tariffs to apply maximum pressure to ensure compliance. Of these, $9 billion are involved in the outstanding A350 and A380 claims. It has meanwhile levelled significant subsidy claims against Boeing.

Both companies have cut output of four-engined A380s and 747s due to airlines' preference for smaller models and Boeing has long said the industry's behemoths have had their day. For a claim to stick at the WTO, subsidies must be found not just to exist but to have caused real harm.

The U.S. and the European Union have spent more than a decade wrangling over various government efforts to help Chicago-based Boeing and Toulouse, France-based Airbus defray billions of dollars in costs to design and produce commercial aircraft.

"Companies should not have to compete with governments - that is what this case is about", said Robert Novick, co-managing partner at Boeing's trade lawyers WilmerHale.



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