WTO reverses 777X tax incentive subsidy ruling

WTO reverses 777X tax incentive subsidy ruling

The World Trade Organisation has reversed last November’s prohibited subsidy ruling against a tax incentive for the production of the Boeing 777X in Washington State. It has also upheld an earlier dismissal of the EU’s claims against the remainder of the incentives.

And it stipulated that the tax treatment Boeing is receiving in Washington State is not a prohibited subsidy.

As well as reversing the ruling on the tax incentive, the WTO’s new ruling ends the most recent of the long-standing cases that the EU has brought against the US.

The US previously successfully challenged the EU over its subsidies to Airbus.

Boeing general counsel J. Michael Luttig commented, “No further appeal of today’s decision is available to the EU.

“The latest of the false claims Airbus and its government sponsors have made has now been rejected by the WTO. The EU and Airbus, meanwhile, continue to be in flagrant breach of WTO rulings and must eliminate the massive illegal subsidies the WTO said a full year ago had not been addressed, or risk US sanctions against European exports.

“Boeing has supported US government actions to comply with its WTO obligations. We supported and facilitated changes to Boeing contracts with NASA and the US Department of Defense for R&D work that the WTO deemed inconsistent with its rules.”

But Airbus has hit back with its own accusations of illegality, claiming that a separate review in the DS353 case had confirmed that the subsidies to Boeing were illegal and actionable, and caused it “massive harm”.

In a statement on its website, the company says: “In total, combining the different WTO’s rulings addressing the illegal subsidies to Boeing, the total impact of the subsidies is estimated to add up to US$100 billion in lost sales to Airbus. Boeing illegal subsidies are still illegal and need to be removed. If it is a ‘No’ or a ‘No No’ does not make big difference in global fair trade and play. ‎The ‘game’ is far from over.

“Airbus reiterates its long-stated view that this transatlantic spat, which lead the WTO to a huge amount of serious work and a large number of important panel reports over many years, can only finally be resolved by negotiations aimed at finding a global agreement to come to a level playing field in government support for the large civil aircraft industry.

“Airbus would like to take this opportunity to thank the European Commission and the governments of France, Germany, the UK, and Spain for their continued efforts to defend the industry and fair trade practices at the WTO.”

 

Matt Taylor
By Matt Taylor September 8, 2017 13:06