WTO Airbus ruling leaves both sides claiming victory

Airbus A380s under construction The decision is a major victory for the EU in its longest-running trade dispute with the US

Both the US and Europe have claimed victory after the World Trade Organisation (WTO) partly overturned an earlier ruling that Airbus received billions of euros in illegal subsidies.

Airbus chief executive Tom Enders said it was "a big win for Europe", and the EU had won "on all key elements".

However, US officials called it a "definitive victory" for their side.

They said $18bn in subsidies were still deemed to have broken rules and "caused serious prejudice" to US interests.

Price versus principle

"We're enormously pleased with these findings," said Tim Reif, the US general counsel for trade, commenting on the latest decision in the longest-running transatlantic trade dispute.

"This report confirms [that] for decades the European Union... [has] provided massive amounts of market-distorting launch aid and other subsidies that are inconsistent with WTO rules."

However, Airbus' Mr Enders claimed the decision meant Germany, France, the UK and Spain could continue providing funding for Airbus via public-private partnership arrangements.

Analyst Ilana Bet-El: "A strong victory for Airbus in some ways, but not totally"

According to Ilana Bet-El, an independent aerospace analyst, the decision represented "a strong victory for Airbus in some respects, but not totally".

While the WTO panel agreed with the US that launch aid provided by the Europeans to Airbus did constitute unfair subsidies, some specific types of aid had now been excluded, she told the BBC.

More importantly, Airbus had won on a point of principle, that the subsidies were not aimed at boosting exports.

"What we are down to is negotiating over the price, not the principle," she said.

And while there may still be haggling over how much Airbus would have to pay back, she said the WTO had also now decided there was no immediate need for it to be repaid.

The partial defeat for the US follows another blow earlier this month, when in a separate case Boeing was found guilty of receiving over $5bn of unlawful subsidies from Washington.

According to Ms Bet-El, this case was more problematic, as the US had lost on a matter of principle - namely that the US defence budget could not be used to subsidise the civilian aerospace industry.

'Not entirely satisfactory'

Boeing and Airbus both put out prepared press releases detailing why the decision represented a resounding victory for their side.

"This is a clear, final win for fair trade that will level the playing field for America's aerospace workers," said Boeing's head, Jim McNerney.

In contrast, Airbus' head of communications, Rainder Ohler, called on Boeing "to accept this legal defeat and end the masquerade".

Meanwhile, the WTO warned the long-running dispute was not yet at an end.

"We realise that, after five years of panel proceedings and almost ten months of appellate review, there are a number of issues that remain unresolved in this dispute," said the WTO in the conclusion to its 600-page report.

"Some may consider that this is not an entirely satisfactory outcome."

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