Business

WTO rules Boeing got illegal subsidies

But $5.3b payout less than rival’s

ROSS D. FRANKLIN/ASSOCIATED PRESS
Karel De Gucht, EU trade commissioner, said Boeing would not have been able to launch its 787 Dreamliner (above) without government support.

GENEVA - The World Trade Organization ruled Monday that US planemaker Boeing received $5.3 billion in illegal government subsidies over a quarter-century, far less than what archrival Airbus received according to an earlier finding.

The two companies are locked in a long-running trade dispute over a market believed to be worth more than $3 trillion over the next decade. Each has complained to the WTO that the other is receiving state aid.

Last May, a WTO panel ruled on a US complaint that European governments provided to Airbus, based in Toulouse, France, with $18 billion in subsidies, though not all were found to be illegal under international rules.

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The European Union had hit back with allegations that Boeing got $19.1 billion in similar subsidies between 1989 and 2006.

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While the WTO appeals panel did say that Boeing received illegal aid, the sums were far smaller than the EU alleged.

As usual, both sides claimed a measure of victory.

“The appellate body has now spoken in both the Airbus and Boeing cases,’’ said Rainer Ohler, spokesman for Airbus. “Comparing the core claims made by both sides, the net outcome is clear: Boeing’s cash grants are fundamentally illegal, while the system of loans to Airbus by European governments is legal and may continue. Boeing and the US now will have six months to implement the WTO decision.’’

Boeing, however, said in a statement that the WTO ruling “slashed earlier findings of harm to Airbus from US subsidies. The decision confirms that in terms of amount, effect, and nature, US government support to Boeing is minimal in comparison to the massive European subsidies provided Airbus.’’

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Now that the ruling is in, Boeing and Airbus are each required to prove they are complying with WTO rules.

Boeing emphasized that the US government has already removed some $2 billion in prohibited subsidies, leaving about $3 billion still to be addressed.

The European Commission, whose complaint to the WTO was the subject of the ruling, said it welcomed the confirmation that Boeing also received billions of dollars in illegal subsidies.

Karel De Gucht, EU trade commissioner, called Monday’s ruling vindication of the “EU’s long-held claims that Boeing has received massive US government handouts in the past and continues to do so today.’’

De Gucht said Airbus has lost $45 billion in sales because of illegal Boeing subsidies, and Boeing would not have been able to launch its 787 Dreamliner without government support.

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He added the ruling confirms that Boeing was due to get $3 billion to $4 billion in illegal aid because of tax measures from Washington state, where it was formerly based.