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WTO board finds Boeing receives some illegal subsidy benefits

Another battle has opened in the 13-year-old trade war between Boeing and Airbus at the World Trade Organisation.

Nine months after ruling that Airbus had ignored several of the WTO's findings, the trade body's Dispute Settlement Board (DSB) ruled on 9 June that Boeing also has failed to correct several illegal benefits from US federal and state governments.

Both findings are expected to enter a lengthy appeals process, further prolonging a dispute that erupted in 2004 over European Union launch aid for the Airbus A380.

"Airbus looks forward to the day that this ridiculous dispute can be put to bed and we can focus our full attention on investing in further innovation and engaging in healthy competition," says Airbus Group chief operating officer Fabrice Bregier in a statement.

Although Bregier considers the dispute frivolous, the same Airbus statement also argued that the board's findings prove that Boeing's subsidies have cost Airbus $100 billion in lost sales and other damages.

"The amount of money involved completely distorts trade," says Airbus chief executive Tom Enders. "There is absolutely no place for these unfair and anti-competitive practices in today's modern and dynamic global marketplace."

As has become the norm in the long-running dispute, Airbus and Boeing released statements that seem to be describing different rulings. While Airbus claimed vindication, Boeing says the board's ruling clears the company of "virtually all" trading errors.

"The WTO originally dismissed 80% of the allegations the EU first made, and today stated unequivocally that the United States complied with virtually all of the WTO's findings on the remaining amount," said Boeing corporate counsel J Michael Luttig.

The DSB dismissed several Airbus attempts to widen the scope of Boeing's improper subsidies, but accepted others.

The Airbus claim that it has suffered $100 billion in losses arising from the dispute is impossible to quantify from the public version of the DSB report, which, citing competitive concerns, redacts the value of several of the subsidised benefits that it ruled Boeing continues to receive.

Among the identified amounts tied to subsidies by the DSB are a $28 million contract with the US Federal Aviation Administration, a $54.1 million tax credit by the city of Everett, Washington, and about $78 million in tax exemptions by state of South Carolina

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