WTO rules in favour of EU and Airbus

posted on 1st April 2019 by Justin Burns
WTO rules in favour of EU and Airbus

Airbus said it welcomes the report of the WTO Appellate Body published on 28 March which it said “confirms that the United States failed to withdraw the subsidies granted by federal, state and local authorities to Boeing, and to remove the harm those subsidies caused to Airbus”.

The Appellate Body has rejected every single United States argument whereas it has taken all EU legal points on board.  In addition, the WTO highest court has also qualified a number of additional US federal and state programmes as illegal subsidies, and even, as prohibited subsidies as in the case of the Foreign Sales Corporation scheme (FSC), a major win for the European Union (EU).

The report requests that further compliance steps are necessary from the United States and Boeing and that failure to do so will provide the European Union the possibility to seek countermeasures on imports of US products.

Airbus general counsel, John Harrison stated: “This is a clear victory for the EU and Airbus.   It vindicates our position that Boeing, while pointing fingers at Airbus, has not taken any action to comply with its WTO obligations, contrary to Airbus and the EU.

“With this damaging report, continuing to deny they receive massive illegal subsidies from the United States government is no longer an option. Stated differently, absent settlement, the US will pay – in perpetuity – billions in annual sanctions driven by every single flying Boeing programme, while the EU would face, in the worst case, only minor issues.

He added: “We hope that these findings will prompt the United States and Boeing to move forward constructively in this long-standing dispute and join us in working towards a fair-trade environment. In the absence of a constructive approach, the EU now has a very strong legal case to move forward to countermeasures.”

Airbus thanked the European Commission and the governments of France, Germany, the United Kingdom and Spain for their continuous support throughout the long dispute process and their longstanding efforts to restore a fair level playing field are now clearly showing results.