CHICAGO, Sept. 22, 2016 /PRNewswire/ -- A World Trade
Organization compliance panel today ruled that the European Union
has failed to comply with its obligation to remedy the massive
subsidies European governments have provided to create and sustain
Airbus for more than 40 years.
Rather than comply with their WTO obligations to remedy the
$17 billion in past subsidies
provided to Airbus, the WTO found that EU Member States provided
Airbus with new illegal launch aid – reportedly almost $5 billion – so they could launch the new A350.
The WTO was explicit: "[I]t is apparent that the A350 XWB could not
have been launched and brought to market in the absence of LA/MSF
[Launch Aid]." The WTO previously found that essentially no model
of the entire Airbus fleet would exist today – including the A300,
A310, A320, A330, A340 and A380 – were it not for the illegal
subsidies provided by the European governments.
"Today's historic ruling finally holds the EU and Airbus to
account for their flouting of global trade rules," said
Dennis A. Muilenburg, Boeing
chairman, president and CEO. "This long-awaited decision is a
victory for fair trade worldwide and for U.S. aerospace workers, in
particular. We commend the administration, specifically the Office
of the U.S. Trade Representative, and the U.S. Congress for their
unwavering commitment to this matter and to enforcing global trade
rules," he said.
"The World Trade Organization has now found that Airbus is and
always has been a creature of government and of illegal government
subsidy," said Boeing Executive Vice President and General Counsel
J. Michael Luttig. "The day of
reckoning for launch aid has finally arrived. Prior WTO rulings
found that Airbus itself likely would not even exist without
illegal launch aid, equity infusions, and infrastructure support.
Today the WTO went further and found that Airbus' existence
continues to depend upon illegal, trade-distorting government
subsidies in the form of launch aid, most recently for the A350 XWB
– which reportedly totals almost $5
billion," he said.
Luttig explained that under prior WTO rulings the EU had an
obligation to remedy the subsidies for its past airplanes,
including the A380. "Instead, the EU compounded the illegal
practice by giving Airbus additional launch aid for the A350 XWB.
After any appeal of today's compliance ruling, the next step for
the U.S. government is to obtain WTO authorization to impose
billions in retaliatory duties. The U.S. government has previously
calculated those to be up to $10
billion annually."
Today's ruling confirms that Airbus both failed to withdraw old
subsidies and instead put in place new subsidies for a grand total
of almost $22 billion (principal
amounts only). That includes $15
billion in launch aid for each Airbus commercial aircraft
program from the A300 through the A380, and $2 billion in non-launch aid subsidies. The WTO
also ruled for the first time that Airbus received illegal launch
aid for the A350 XWB. News reports put the total for that
program at almost $5 billion. Echoing
prior rulings, the WTO panel also found that Airbus and its current
product line likely would not even exist without launch aid.
"No form of government support compares to launch aid – in terms
of amount, nature, or effects," Luttig said. "Launch aid created
entire aircraft programs – indeed, an entire aircraft company – as
the WTO found today. This is a type of government support that the
WTO has found, over and over again, to be unequaled both in nature
and amount, unfair to Boeing and United
States workers, and flatly illegal under global trade rules.
Today's ruling confirms that these illegal subsidies will now
end."
Luttig stressed that the final stages of the case against Airbus
subsidies are independent of the European cases against
the United States and that the EU
needs to act now. "The cases are separate and distinct," he said.
"The EU lost this compliance case for the simple reason that it did
nothing to remedy its massive subsidies which have had profound
effects on the commercial airplane market. Whatever happens in the
European cases against the United
States, launch aid and other illegal government support for
Airbus will now come to an end."
Contact:
Charlie Miller
Office: +1 312-544-2132
Mobile: +1 312-623-5427
charlie.miller@boeing.com
Tim Neale
Office: + 703-465-3220
Mobile: + 703-340-7436
tim.d.neale@boeing.com
Follow us on Twitter: @Boeing
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SOURCE Boeing