EU may appeal WTO ruling on Airbus aid

The European Union (EU) says it may appeal a ruling at the end of June by the World Trade Organisation (WTO), which declared that some launch aid subsidies to aircraft manufacturer Airbus were illegal.

1st Jul 2010


The European Union (EU) says it may appeal a ruling at the end of June by the World Trade Organisation (WTO), which declared that some launch aid subsidies to aircraft manufacturer Airbus were illegal.


In its final report on case DS 316, brought by the USA against the EU, the WTO says launch aid is acceptable in the form of repayable loans offered at market rates. However, it continues, some of the launch aid provided to the A380 very-large airliner, as well as earlier programmes in the 1970s and 1980s, was granted at favourable rates and therefore was an illegal export subsidy.


Boeing and US lawmakers welcomed the ruling, while EU officials declared themselves “disappointed”, adding that they may appeal.


“This final report needs to be read together with the forthcoming interim report on subsidies provided in the US to Boeing,” EU Trade Commissioner Karel De Gucht says. “The EU remains committed to a negotiated outcome to the dispute with no preconditions on either side.”


Meanwhile, Boeing hailed the WTO ruling as declaring “that billions of dollars in European launch aid subsidies used by Airbus to develop its commercial airplanes are illegal and must end”. The US manufacturer says it lost as many as 60,000 jobs because of European government subsidies to its Toulouse-based competitor.


“This is a landmark decision and sweeping legal victory over the launch aid subsidies that fuelled the rise of Airbus and that continue to provide its products a major cost advantage,” says Boeing Chairman, President and Chief Executive Officer Jim McNerney. “We now join the U.S. government in urging full compliance with the ruling and a permanent restoration of fair competition within our industry.”


US Senator Patty Murray says Airbus could have benefitted from as much as US$200 billion in subsidies, research and development grants and infrastructure support.
The European side argues, however, that the WTO ruling does not support the argument that launch aid cost US jobs and hurt Boeing’s market share.


“The WTO panel report ... confirms Airbus’s earlier predictions: 70 percent of the US claims were rejected and wild allegations have been proven wrong,” Airbus says. “Neither jobs nor any profits were lost as a result of reimbursable loans to Airbus.”


According to Rainer Ohler, the company’s head of public affairs and communications: “These results are in line with the previous versions of the WTO panel’s findings. Airbus, the EU and the Member States are closely analyzing the report in advance of a possible review by the WTO Appellate Body.”
The EU says it will continue providing launch aid to Airbus’s A350 programme while both sides await the WTO’s interim report on the EU case against the US side.

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