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United States Trade Representative Ron Kirk’s Statement on the WTO Boeing Subsidy Decision

Ambassador Ron Kirk

USTR Press Briefing Regarding WTO Boeing Subsidy Case
Washington, DC
March 31, 2011

*As Prepared for Delivery*


"Good morning. Thank you all for being here today. I am very pleased to announce that the WTO has vindicated the view the United States has taken for the last 20 years – that the subsidies the Europeans give to Airbus dwarf anything that the U.S. government does for Boeing. The numbers are clear on this point. A different panel last year found that the EU, France, Germany, Spain, and the United Kingdom gave Airbus launch aid and other WTO-inconsistent subsidies in the amount of $20 billion. That panel recommended that the European Union withdraw all of the subsidies, or eliminate their adverse effects. The panel report today does find that the United States gave Boeing subsidies. We disagree, and are studying whether to appeal those findings. But the point I would like to emphasize now is that the only recommendation the panel made to the United States was to withdraw programs and tax measures worth $2.7 billion, while the recommendation for the EU affects financing and other measures worth $20 billion.

"In reaching this conclusion, the Panel rejected most of the arguments advanced by the EU. Let me give you a few examples. The Panel rejected the European argument that a Department of Commerce program to fund general research into advanced technologies was really a subsidy targeted to Boeing. The Panel rejected the European argument that a job training program operated by the Department of Labor was really a subsidy targeted at Boeing. The Panel rejected the European argument that the construction of roads and port facilities to eliminate traffic bottlenecks and port congestion in Washington state were subsidies to Boeing. The Panel rejected the European argument that money the Department of Defense spent on military research gave Boeing some advantage on its civil airplanes. And the Panel rejected the European argument that NASA’s work to advance and publicly disseminate basic aerospace knowledge was really a subsidy targeted to Boeing. In short, the Panel confirmed what we have always known – that WTO rules do not prevent federal and state governments from making general investments in the physical and knowledge infrastructure we need to remain competitive.

"I’d like to return to last year’s findings against the European subsidization of Airbus. In that dispute, the Panel found that every single grant of launch aid that the EU member States made to Airbus was a subsidy. It confirmed that launch aid and other subsidies significantly distorted the launch decisions Airbus made, and caused adverse effects to Boeing’s sales of competing aircraft. For years the Europeans have insisted that this $20 billion in subsidized funding for Airbus was justified because the United States was giving Boeing even more. Today’s report exposes the enormous error in those claims. There is simply no justification for the large amounts of subsidies that European governments have given Airbus. Therefore, we will say again what we said last year – that given the WTO findings that Europe has never provided launch aid on commercial terms and in a manner consistent with its WTO obligations, we expect the governments that have backed Airbus to refrain from future launch aid disbursements.

"In closing, I would take this opportunity to reiterate this Administration’s intention to make sure that our workers and businesses can compete on an even playing field. In last year’s aircraft findings, we showed that the Obama Administration’s resolution to eliminate the WTO-inconsistent advantages our trading partners confer on their industries. In this year’s findings, you can see the results of our dedication in defending the steps our federal, state, and local governments take to keep us competitive. Protecting the rights of American manufacturers, farmers, ranchers, services providers, and workers under our trade agreements is and will remain a priority of this Administration."