Europe Still Not Complying on Airbus Subsidies, WTO Panel Finds
For a second time, a World Trade Organization panel rejected the European Union's claim that it has ended launch subsidies for Airbus, and remedied their adverse effects on Boeing. The earlier compliance panel ruling against Airbus led to the largest authorized tariff action ever at the WTO -- the $7.5 billion worth of goods from EU countries facing either 10 percent or 25 percent tariffs (see 1910020044).
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The EU had pointed to 18 actions they had taken after losing the subsidies case. It argued that Airbus had repaid loans related to the aircraft, but the WTO said that wasn't enough to comply. Moreover, although terms of government loans were changed, the EU didn't prove that a commercial lender would have lent under those terms, especially since the company is winding down production of the very large aircraft. And the fact that the model is winding down is also not an argument that the subsidies no longer matter.
The panel said England, France, Germany and Spain didn't take appropriate steps to remove the adverse effects of the trade-distorting subsidies. It made its ruling public Dec. 2. The Office of the U.S. Trade Representative responded to the report with a statement that said: “Today’s findings confirm that, despite losing in five previous WTO reports, Europe remains more focused on generating meritless litigation than it is in addressing the massive subsidies to Airbus that continue to harm the U.S. aerospace industry and its workers.”