Boeing found harmed by Airbus aid, exposing European Union to USA sanctions

Boeing found harmed by Airbus aid, exposing European Union to USA sanctions

The WTP decision affirmed a ruling that France, Germany, Spain and the United Kingdom have failed to adequately remedy market-distorting aid for the launch of Airbus's A380 superjumbo, infrastructure support and equity investments that unfairly benefited the plane-maker.

The U.S. says it would slap tariffs on European goods unless the EU stopped "harming U.S. interests", but the European Commission says the U.S. had lost most of its claims and that much of the aid faulted by the WTO had expired in 2011.

The WTO said in a report yesterday that Britain, Germany, France and Spain also had provided illegal subsidies to the aircraft maker and, like the European Union, had failed to comply with a ruling two years ago to stop.

The shares of Airbus had fallen shortly after the WTO issued its findings and were poised to close down around 0.86 percent.

The WTO report coincides with mounting trade tensions over US aluminium and steel tariffs and the impact on European firms of Washington's decision to exit the Iran nuclear pact.

The latest WTO ruling on the decade-old case, which was initiated in 2006, ends the dispute and clears the way for the United States Trade Representative (USTR) to seek remedies in the form of tariffs against European exports to the United States, Boeing said.

Airbus now has a case pending at the WTO accusing the U.S. of providing illegal support for Boeing. "That ends today", he said.

Mendes explained that the Trump administration's support for the ruling is at odds with its own attempts to unravel the WTO - and could put it in a hard place if the WTO rules against Boeing in the next case.

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Airbus chief executive Tom Enders called the ruling a "significant legal success for the European aviation industry".

Both sides are expected to push for billions of dollars in sanctions annually by barring a negotiation deal.

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

The fight dates to 2004, when European Union authorities said Boeing received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006.

But the organization also overturned a previous ruling that found the subsidies were hurting sales of the single-aisle 737, Boeing's most popular plane.

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.

"The Airbus case against Boeing is yet to come".

The size of US tariffs to be allowed will be determined through a WTO arbitration process, and will be based on the annual harm to USA and Boeing - losses that the USA had previously pegged as ranging from $7 billion to $10 billion a year.

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