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American aerospace workers will benefit from WTO Panel ruling confirming billions of dollars in European subsidies provided to Airbus violated rules
Washington, D.C. – Today United States Trade Representative Ron Kirk announced that a World Trade Organization (WTO) dispute settlement panel confirmed that decades of subsidies provided by the European Union (EU) and certain member states to Airbus are inconsistent with WTO rules. Specifically, the WTO Panel found that every instance of launch aid provided by certain EU nations for new Airbus aircraft over the last forty years, as well as other subsidies the United States had challenged, caused adverse effects to the interests of the United States and therefore are WTO-inconsistent subsidies. The Panel also concluded that certain launch aid provided for the A380 superjumbo jet was a prohibited export subsidy under WTO rules.
“This important victory will benefit American aerospace workers, who have had to endure watching Airbus receive these massive subsidies for more than 40 years. These subsidies have greatly harmed the United States, including causing Boeing to lose sales and market share. Today’s ruling helps level the competitive playing field with Airbus,” said Ambassador Kirk. “Protecting the rights of American manufacturers, as well as farmers, ranchers, services providers, and workers under our trade agreements continues to be a priority of this Administration. President Obama and I are committed to enforcing our trade agreements and, when necessary, using the dispute settlement process that is consistent with the rules-based global trading system at the World Trade Organization.”
In reaching these findings, the Panel concluded that European government launch aid had been used to support the creation of every model of large civil aircraft produced by Airbus. The Panel’s findings also confirmed that launch aid and the other challenged subsidies to Airbus have significantly distorted the global market for large civil aircraft, and that those subsidies have directly resulted in Boeing losing sales and market share.
“What emerges clear as day from this panel report is that Europe has never been able to provide launch aid in a manner that is consistent with its WTO obligations,” said Office of the United States Trade Representative General Counsel Tim Reif. “This panel report should therefore be a strong signal to the European Union and the member states to refrain from future launch aid disbursements.”
The United States initiated this WTO dispute in October 2004 to end decades of launch aid and other subsidies provided to Airbus. A panel was established to examine the matter in May 2005.
Both sides have an opportunity to appeal the decision to the WTO Appellate Body within 60 days. If the Panel report is adopted or if it is affirmed on appeal, the WTO will recommend that the member states withdraw the prohibited subsidies within 90 days, in line with the deadline specified by the Panel in its report. With respect to the other subsidies, the WTO will recommend that the EU and the member states that back Airbus take appropriate steps to remove the adverse effects or withdraw the subsidies. WTO rules contemplate such action being taken within six months.
In either case, should the European Union and the relevant member states fail to comply with these recommendations by the deadline, the United States would be able to seek the right to impose countermeasures. If the EU and the member states assert compliance, but the United States disagrees, the United States could seek to have any disagreement referred back to the Panel.