WASHINGTON – The World Trade Organization has ruled Airbus received billions of dollars in illegal European government subsidies for its aircraft and the practice must end, Boeing officials said today as the body which governs international trade released its findings.
The case dates back to 2004, when the U.S. Trade Representative filed a complaint with the WTO alleging Airbus had received $200 billion worth of launch aid from the governments of France, Germany, the United Kingdom and Spain. The U.S. alleged the aid allowed Airbus to win more than half the commercial airplane market from Boeing which for years had been the leading manufacturer of passenger jets in the world.
The WTO had released its 1,000-page report to U.S. trade officials and their Europeans counterparts three month ago, but it had remained confidential until now so it could be officially translated. Members of Congress had been briefed on the report in late March by the USTR office, but few details of the findings had been released.
In the coming weeks, the WTO is supposed to release its interim report in a case brought by the Europeans alleging Boeing had also received illegal subsidies.
"Each and every instance of launch aid that the U.S. challenged was held to be illegal," Boeing General Counsel J. Michael Luttig said in a statement today. "The (WTO) panel said that without the illegal subsidies it received, Airbus would not have the aerospace market share it now enjoys."
USTR officials are scheduled to hold a news conference on the WTO report later this morning.
European and Airbus officials had previously said that 70 percent of the U.S. allegations had been thrown out by the WTO.
Through the late 1980s, Boeing held almost two-thirds of the international commercial airplane market. But less than 40 years after it received its first order, Airbus now controls more than half the market.
Exactly what sanctions Airbus might face have yet to be determined and appeals are expected. But if Airbus fails to rectify the illegal subsidies, the U.S. could eventually impose billions of dollars in punitive tariffs on Europeans products.