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WTO rules European Union failed to halt all Airbus subsidies

16 May 2018

The WTO ruled that Airbus had failed to mitigate the damage to Boeing from illegal subsidies used to develop the Airbus A380 and A350 jets, according to media reports.

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

The tariffs could be scheduled as early as 2019 and would likely be the largest-ever WTO authorization of retaliatory tariffs, Boeing said.

Boeing alleges the European Union has doled out more than $22 billion in illegal subsidies to Airbus, saying in a statement that the stage is now set for "the largest-ever WTO authorization of retaliatory tariffs" as early as next year. The Geneva-based WTO can't force nations or companies to drop payments that violate trade rules, but it can authorize retaliatory measures to pressure governments into complying with its rulings. Boeing claims that the EU provided the European aerospace giant more than $22 billion in illegal subsidies.

The Trump administration appeared ready to do just that.

In a statement issued Tuesday, Boeing said Airbus provided more than $22 billion in illegal subsidies, and until its European rival addresses those damages, "it is anticipated that US tariffs will be authorized up to the amount of annual harm this market-distorting tactic is causing".

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The decision Tuesday affirmed a ruling that European Union member states 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 planemaker.

A WTO panel and the Appellate Body had already.

"Today's final ruling sends a clear message: Disregard for the rules and illegal subsidies is not tolerated", Boeing Chairman and CEO Dennis Muilenburg said.

"This landmark ruling by the WTO Appellate Body is the final decision in this case, which was initiated in 2006", the release said.

"The commercial success of products and services should be driven by their merits and not by market-distorting actions".

WTO rules European Union failed to halt all Airbus subsidies