The Boeing Co. received illegal aid from the U.S. government and the states of Washington, Illinois and Kansas, the World Trade Organization has ruled. The European Union made the announcement Monday.
The WTO ruling is part of a long-running battle between Boeing and its chief rival, Airbus, over research help and financing aid that both planemakers have received.
The EU said the WTO report confirmed the preliminary ruling on the case made in September. That ruling came months after the Geneva-based trade body faulted European governments for illegally supporting Airbus, a unit of European Aeronautic Defence and Space Co.
The EU alleges that Boeing received almost $24 billion in illegal subsidies, such as research grants and free use of technology, from NASA, the Department of Defense, and the three states. However, how much of this aid the WTO deemed illegal won’t be clear until Monday’s report is published this spring.
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Airbus, however, issued a statement that said the report shows Boeing received “at least $5 billion” in illegal subsidies. Airbus said the ruling, when made public, will show that without those illegal subsidies, “Boeing would not have been able to launch the 787.”
If confirmed, that allegation about the funding of the 787 Dreamliner, is certainly serious.
But in comparison, the final public WTO report issued last year on the subsidies to Airbus was a broader indictment. That ruling found illegal the $15 billion paid in advance specifically to fund the development phase of all of Airbus’s jet programs, plus $5 billion in other subsidies.
Furthermore, sources on the U.S. side of the case said in September that about 40 percent of the $5 billion figure for Boeing subsidies pertained to a U.S. tax law that has already been changed. Boeing considers this portion of the WTO finding already remedied.
If that is confirmed when the final report is publicly released, it would leave just $3 billion in illegal subsidies that Boeing must answer for, versus $20 billion for Airbus parent company European Aeronautic Defence & Space Co., or EADS, The Seattle Times reported Monday.
Boeing claimed Monday that the WTO had come out in its favor. “The WTO rejected almost all of Europe’s claims against the United States,” it said in a statement. “Nothing in today’s reports even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received.”
Trade analysts say the dispute will likely be resolved by negations. Their outcome could shape the future structure of the global aviation market, which is expected to be worth some $3 trillion over the next two decades.
Airbus said it expects the dispute to carry on for “several more years,” and that a negotiated settlement is the only way to resolve it.
The Seattle Times and The Associated Press contributed to this report.