US claims win in dispute with EU over aerospace subsidies

“We call on them to end subsidised financing of Airbus immediately”, he said in a statement.

“This report is a sweeping victory for the United States and its aerospace workers”, said US Trade Representative Michael Froman said.

The European Commission has downplayed the ruling.

It said the findings should be read in the context of two other reports expected to address USA subsidies in coming months.

At the smaller end of the market segment there are other suppliers, and certainly the potential for more from China and Russian Federation, for example, in the future – which could well involve state subsidies that eventually end up in front of a WTO dispute settlement panel.

An Airbus representative said they would only comment further once the decision was out.

Sen. Patty Murray, D-Wash.: “This ruling is so important to my home state of Washington and to all the American workers who show up every day in this country to build world-class products”.

The EU claims the USA space agency NASA funded federal programs funneled more than $2.6 billion to Boeing, and other forms of tax breaks and federal level help in the U.S aerospace giant for around $8 billion. It added this continues to be a “cause of serious prejudice to the United States’ interests”.

The Geneva-based trade adjudicator also said that Airbus received subsidies for its new A350XWB long-range plane, though it rejected the US claim these were “prohibited subsidies” that have to be remedied expeditiously.

However, the WTO panel said the U.S. had “failed to demonstrate” that France, Germany, Spain and the United Kingdom had granted prohibited export subsidies for the A380 and A350, or prohibited import subsidies for the A350. The EU first raised the issue with the WTO in late 2014.

The ruling is part of a series of tit-for-tat transatlantic complaints about aircraft subsidies that together make up the world’s largest trade dispute, still raging after 12 years of bitter arguments.

The WTO, through both its initial panel and appellate body rulings, has found illegal subsidies on both sides of the Atlantic.

The WTO is yet to rule on a similar European Union complaint that Boeing benefits from billions of dollars in tax breaks.

Boeing responded to the ruling, saying the WTO had identified new illegal A350 subsidies and ruled against the European Union for failing to remedy $17 billion in illegal aid. The planemaker said the report confirmed that Europe’s chosen method of partnering with its large civil aircraft industry is acceptable under global trade law.

“After any appeal of today’s compliance ruling, the next step for the United States government is to obtain WTO authorization to impose billions in retaliatory duties”.

Both of Washington state’s US senators and several House members praised the development as well.

The loans were a “genuine and substantial” cause of significant lost sales for its USA competitor Boeing, it said.

Ahead of the ruling, a spokesman for Airbus downplayed its significance, saying European governments and the company had corrected the problems revealed in the previous decisions.

“We will address the few still remaining points indicated by the report in our appeal”, concluded Airbus. We did what we needed to do and did it in the agreed timeframe.

“But this particular case should not be seen in isolation”, McConnell continued. “Before year-end the record subsidies for the 777X will nearly certainly be condemned as illegal”, it said, referring to a new Boeing airliner. Despite that, Airbus wants common sense to prevail: “these disputes can only end in a balanced, mutual agreement”.

“There are certain findings of the panel that we consider to be unsatisfactory”, it said. But even if that happens, trade officials argue that Europe’s subsidies are much more egregious.

Alberto Mucci and Joshua Posaner contributed reporting.