WTO: Boeing’s US state subsidies legal

Today’s ruling concerns the so-called 'baby Boeing' case that relates only to tax breaks and other incentives provided by Washington State to support production of Boeing’s 777X, which is set to be airborn in 2020. — Reuters pic Today’s ruling concerns the so-called ‘baby Boeing’ case that relates only to tax breaks and other incentives provided by Washington State to support production of Boeing’s 777X, which is set to be airborn in 2020. — Reuters pic GENEVA, Sep 4 — Subsidies given by the US state of Washington to Boeing are legal, a World Trade Organisation appeals body said today, partially overturning a victory by rival Airbus and the European Union last year. 

The two aviation giants have been locked for years in a sprawling set of disputes at the Geneva-based WTO. 

Today’s ruling concerns the so-called “baby Boeing” case that relates only to tax breaks and other incentives provided by Washington State to support production of Boeing’s 777X, which is set to be airborn in 2020.  

Last November, WTO judges found that one of the subsidies Washington State offered was “prohibited” as it encouraged the use of domestic materials, and thus caused trade distortions.



The United States, acting on behalf of Boeing, appealed the decision, while the EU launched a “cross-appeal” for Airbus, insisting that seven of Washington State’s Boeing benefit schemes violated the rules of the 164-member WTO. 

Brussels targeted benefits such as a reduced business tax rate, tax credits and exemptions. 

The United States secured an outright victory in today’s ruling, which is not subject to appeal, the WTO said.

“The latest of the false claims Airbus and its government sponsors have made has now been rejected by the WTO,” Boeing general counsel J. Michael Luttig said in a statement. 

“This was a sweeping and clean win for the United States,” he added.

According to previous Airbus estimates, Washington State has given Boeing tax breaks worth nearly nine billion dollars in a scheme scheduled to run through 2040. 

Boeing has dismissed those numbers, putting the benefits to date at a maximum of US$1 billion (RM4.3 billion).  

Brussels and Washington have two larger cases pending at the WTO, centred on various claims about allegedly illegal subsidies for their respective aviation industries. 



Last September, a WTO panel found that Brussels had not respected a 2011 ruling ordering it to take steps to withdraw several support and subsidy programmes for Airbus.

Boeing says that illegal support amounts to US$22 billion. 

Meanwhile, a separate 2012 case on benefits Boeing received from federal, state and local governments in the US is still being litigated.  

Some aviation officials have called for a better way to resolve the seemingly never-ending set of tit-for-tat WTO disputes, including possibly a new global agreement on public support for the aircraft industry. 

The WTO’s dispute settlement system has faced fresh scrutiny since President Donald Trump’s trade office indicated it may start ignoring rulings that hurt US interests. — AFP

Source: The Malay Mail Online





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