In a final report published Thursday, the dispute panel of the World Trade Organization ruled that Boeing was granted approximately $5 billion in illegal government subsidies between 1989 and 2006.
The finding included $16 million in Washington state tax breaks between 2004 and 2006 that have been ruled illegal. That part of the ruling raises doubts about the continuation of those tax reductions, which are set to run through 2024.
However, confirming details leaked from a preliminary report last September, the WTO tally of Boeing subsidies pales in comparison to the roughly $20 billion in subsidies to Airbus that were ruled illegal by the WTO last year.
“The WTO has vindicated the U.S. position,” said U.S. Trade Representative Ron Kirk in a news conference. “The subsidies the Europeans have given to Airbus dwarf anything the United States has provided to Boeing.”
The Boeing subsidy total does not include some Department of Defense research grants, three of which were also ruled to be illegal subsidies but were not quantified in the report. U.S. attorneys estimate that these grants total about $112 million.
On the other hand, the list of illegal Boeing subsidies does include $2.2 billion in tax credits from a U.S. law that was repealed in 2006 under pressure from the WTO. Boeing hasn’t benefited from that tax credit since then, and considers this portion of the WTO finding already remedied.
That leaves just about $3 billion in past subsidies that Boeing still must answer for.
In a technical briefing, attorneys for the office of the U.S. trade representative, who asked not to be identified individually, said they are “looking at the possibility of appeal” against those remaining findings.
The majority of the government aid to Boeing that the WTO ruled to be illegal came in the form of research and development, or R&D, grants from NASA deemed to specifically target the interests of Boeing’s commercial jet division and in particular its key 787 Dreamliner jet program.
“Absent the aeronautics R&D subsidies, Boeing would not have been able to launch an aircraft incorporating all of the technologies that are incorporated on the 787,” the WTO panel concluded.
That is the sharpest criticism of the advantages gained by Boeing in the entire report.