Boeing subsidies illegal, says World Trade Organization
- 31 March 2011
- From the section Business
US aircraft manufacturer Boeing received at least $5.3bn (£3.3bn) in unfair aid from Washington, the World Trade Organization (WTO) has concluded.
The subsidies included money for research and development from the Nasa space agency, a panel of international trade judges has ruled.
Last year the WTO said that Boeing's arch rival Airbus had received illegal aid from European governments.
The two companies have been at war over state aid for almost six years.
The case is one of the most complex ever brought before Geneva-based WTO, which has issued 2,000 pages of rulings.
Both companies claimed that the WTO's latest ruling bolstered their case.
"It's time for Boeing to stop denying or minimising the massive illegal subsidies it gets," said Rainer Ohler, head of public affairs at Airbus.
But Boeing said that the WTO's ruling on the size of its aid, $5.3bn, was dwarfed by the $20bn that Airbus had received.
"This WTO ruling shatters the convenient myth that European governments must illegally subsidise Airbus to counter US government assistance to Boeing," said Michael Luttig, general counsel at Boeing.
Europe had claimed that Boeing had received ten sorts of illegal subsidies worth $19.1bn between 1989 and 2006.
The WTO did not uphold all of the claims.
But it said that some of the subsidies, including the Nasa contracts and some tax breaks, had had a serious impact on Airbus' interests.
"The effect of these subsidies was displacement and impedance of Airbus large civil aircraft from third country markets, significant price suppression and significant lost sales," said the WTO in a statement.
It has recommended that the US withdraw the subsidies.
The European Union's trade commissioner Karel De Gucht said the ruling confirmed Brussels' suspicions.
"This WTO panel report clearly shows that Boeing has received huge subsidies in the past and continues to receive significant subsidies today," he said.