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September 5, 2017

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Boeing grants legal, WTO ruling says

SUBSIDIES given by the US state of Washington to Boeing are legal, the World Trade Organization appeals body said yesterday, partially overturning a victory by rival Airbus and the European Union last year.

The two aviation giants have been locked for years in a sprawling set of disputes at the Geneva-based WTO.

Yesterday’s ruling concerns the so-called “baby Boeing” case, which relates only to tax breaks and other incentives provided by Washington State to the US aircraft maker.

Last November WTO judges found that one of the subsidies Washington State offered to support production of Boeing’s 777X jet was “prohibited” as they encouraged the use of domestic materials, and thus caused trade distortions.

The United States, acting on behalf of Boeing, appealed the decision and secured an outright victory that is not subject to further appeal, the WTO ruling said.

“The WTO has rejected yet another of the baseless claims the EU has made,” Boeing said in a statement.

According to Airbus’s own estimates, Washington State has given Boeing tax breaks of nearly US$9 billion in a scheme set to run through 2040.

Boeing has dismissed those numbers, putting the benefits to date at a maximum of US$1 billion.


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