WTO special report

Airbus contends that on three of the eight Airbus aircraft development programmes it has received Reimbursable Launch Investment loans, which it has paid back “providing EU governments with a substantial return on their investment”. But Boeing, says Airbus, “has received billions of dollars from a variety of government sources for continuing development assistance which has never been, and never will be, repaid”.

 

 

In January 2011, the WTO ruled on the Europe/Airbus complaint against US/Boeing. The ruling remains confidential to the parties involved, but according to Airbus it can be interpreted as confirming that Boeing has received massive and illegal government subsidies for many decades, and that they have had a significant and ongoing negative effect on European industry.

According to Airbus, the ruling, when made public, will say:
  • Boeing would not have been able to launch the 787 without illegal subsidies;
  • Boeing has received at least $5 billion of US taxpayer dollars which has been determined illegal;
  • An additional more than $2 billion in state and local subsidies that Boeing will receive in the future are illegal;
  • The effect of the subsidies is significantly larger than the face value of the subsidies in light of their particularly pervasive nature;
  • The pervasive subsidies have thoroughly distorted competition within the aviation industry, directly resulting in significant harm to the European aerospace industry;
  • The effect of these subsidies will continue in the future, putting Airbus at a significant disadvantage.

Airbus adds: “The WTO can be expected to say that the billions in subsidies benefiting Boeing have a significantly greater distortive effect than the Reimbursable Loans to Airbus.

“Airbus estimates at least $45 billion as a realistic figure based on identified lost sales to Airbus as a result from the subsidies. Taking the cases together, the WTO will be seen to now have specifically green-lighted the continued use of loans in Europe and commanded Boeing to end its illegal R&D cash support from NASA, the Department of Defense and the US taxpayers.”

According to Airbus communications chief Rainer Ohler: “Boeing can no longer pretend that it doesn’t benefit from generous and illegal state subsidies. It has been doing so from the start and it’s time to stop the denial,” said. “We expect the WTO dispute to carry on for several more years and as in all trade conflicts, a resolution will only be reached through negotiations. The myth that Boeing doesn’t receive government aid is over and we hope this sets the tone for balanced and productive negotiations going forward.”

In Pictures: Airbus A380

In Pictures: Boeing 737