Boeing Statement on WTO Ruling

Boeing Statement on WTO Ruling

In its ruling on Tuesday, the World Trade Organization (WTO) said the European Union had failed to remove support in the form of preferential government loans for Airbus's A380 superjumbo and A350 twin-aisle jet programs, causing losses for Boeing and United States aerospace workers.

The litigation adds to the tension between the US and Europe, two once-cooperative trade partners that are already sparring over Trump's steel and aluminum tariffs and his decision to back out of a nuclear treaty with Iran.

The WTO's appeals body said the European Union had failed to remove subsidised government development loans for the world's largest airliner, the A380, and Europe's newest long-haul jet, the A350, causing losses for Boeing and US aerospace workers.

It said that tariffs could be in place as early as 2019 and were expected to be the largest-ever WTO authorisation of retaliatory tariffs.

Those compliance issues represent the only instances where Boeing was negatively affected, according to the European Commission, which praised the appellate body's ruling.

The global trade body has found the European Union is still ignoring requests to stop its illegal subsidies for Airbus, handing a victory to its U.S. rival Boeing and paving the way for potentially billions in punitive tariffs.

Boeing says Airbus received illegal aid worth $22 billion, including $18 billion in loans from governments.

Airbus said in a statement released after the WTO ruling that it would take steps to ensure the aid complies with the decision, and predicted any eventual sanctions would be minor.

"Today's final ruling sends a clear message: disregard for the rules and illegal subsidies is not tolerated. The commercial success of products and services should be driven by their merits and not by market-distorting actions", said Boeing head Dennis Muilenburg.

Since then, the WTO has handed down rulings in favor of both sides.

According to the European Commission (EC), the WTO has determined "the majority of EU support to Airbus challenged by the U.S. had expired in 2011" and the EU is not required to take any further action regarding state support for the A300, A310, A320 and A330/A340 aircraft models.

"The result is simple: Airbus pays back its loans, Boeing pays back nothing and continues to exploit the generosity of the U.S. taxpayer". The US government filed a similar claim that year over European subsidies to Airbus.

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

Airbus CEO Tom Enders hit back saying that the ruling yesterday was "only half the story".

The move means that the U.S., under WTO rules, can ask an arbitrator to determine the level of retaliation it can seek against the European bloc as a result of its failure to comply.

Boeing shares were down 0.7% at 342.22 on the stock market today.

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