WTO special report

Boeing/Airbus spat
Boeing and Airbus have been at loggerheads at the WTO over subsidies since 2004.

 

Since 2004, Airbus and Boeing – acting through the European Union and the United States government – have been engaged in a protracted legal battle before the World Trade Organisation in Geneva. At issue are billions of dollars of subsidies, with each side insisting its own relationship with its government is legitimate while the other’s contravenes WTO trade rules, resulting in serious economic damage to its aerospace industry.

A bilateral agreement reached in 1992 between the EU and the US government effectively set the ground rules for state support of Airbus and Boeing. The agreement stood until 2004, when it came under strain as US concern rose over Airbus’s rising market share and imminent push into the super-jumbo sector, with its A380 programme.

In 2004, the US filed a complaint to the WTO, alleging that so-called Reimbursable Launch Investment loans Airbus had received in support of several airliner development programmes, including the A380, did not comply with WTO rules, in part because the loans allegedly cost Airbus less than it would have paid for money from ordinary commercial banks. In response, the EU filed a countersuit against the US, alleging massive and longstanding subsidisation of Boeing, through NASA and defence department research grants and through state and local tax breaks and other subsidies.

Contents:

 

In Pictures: Airbus A330

In Pictures: Boeing 787

Testing the Boeing 787 Dreamliner
Testing the Boeing 787 Dreamliner
Testing the Boeing 787 Dreamliner
Testing the Boeing 787 Dreamliner
Air India Boeing 787 delivery
Air India Boeing 787