Wednesday, 20 February, 2019

'EU paid Airbus $18bn in illegal subsidies'

'EU paid Airbus $18bn in illegal subsidies' 'EU paid Airbus $18bn in illegal subsidies'
Melinda Barton | 16 May, 2018, 02:33

The decision could further ramp up tensions between the USA and Europe, which have been stoked by President TrumpDonald John TrumpAvenatti defends right to release Cohen's financial info Pruitt's 24/7 security requested over fears of Trump policy backlash Senate GOP anger over McCain insult grows MORE's criticism of EU trade policies, his refusal to provide a permanent exemption for tariffs on European steel and aluminum imports and last week's decision to leave the Iran nuclear deal.

The litigation adds to the tension between the USA and Europe, two once-cooperative trade partners that are already sparring over Trump's steel and aluminum tariffs and his decision to back out of a nuclear treaty with Iran.

But the Geneva watchdog dismissed US claims that loans for Airbus's most popular models, the A320 and A330, were also costing Boeing significant sales and in so doing narrowed the scope of one of the world's longest and costliest trade spats.

"This report confirms once and for all that the European Union has long ignored WTO rules, and even worse, European Union aircraft subsidies have cost American aerospace companies tens of billions of dollars in lost revenue", US Trade Representative Robert Lighthizer said in a statement. WTO rules allow it to target any industry since all goods fall into one category.

The EU will now take "swift action to ensure it is fully in line with the WTO's final decision in this case", she said.

Boeing predicted that tariffs could be scheduled as early as 2019 and said this is expected to be the largest-ever WTO authorization of retaliatory tariffs.

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.

Regarding illegal European Union subsidies to Airbus on its dual-aisle programs, the WTO found that Airbus had not complied with earlier rulings to stop the subsidies and that the prior decision remains operative.

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

In January Canadian plane maker Bombardier escaped a punishing 300 per cent duty on sales of its C-series aircraft in the United States which Boeing had said received an illegal subsidy from the UK and Canada. Of these, $9 billion are involved in the outstanding A350 and A380 claims. If we infer that those percentages refer to the more than $22 billion in damages that Boeing claimed in suffered, Airbus is a clear victor.

European officials seized on Boeing's recent criticism of the A380's poor sales record as a way to limit any estimates of damage to Boeing caused by subsidies for the double-decker jet.

Airbus alleges $13.7 billion in illegal tax breaks for Boeing between the 787 and 777 aircraft. For a claim to stick at the WTO, subsidies must be found not just to exist but to have caused real harm.