Boeing Airbus trade dispute concluded

16 May, 2018, 13:44 | Author: Brooke Harris
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The WTO report coincides with mounting trade tensions over US aluminium and steel tariffs and the impact on European firms of Washington's decision to exit the Iran nuclear pact.

In its ruling on May 15, the WTO said the bloc had failed to remove support in the form of preferential government loans for the world's largest airliner, the A380, and Europe's newest long-haul plane, the A350, causing losses for Boeing and U.S. aerospace workers.

Boeing interprets the WTO ruling to say "the European Union has failed to honour multiple previous rulings and has provided more than US$22 billion of illegal subsidies to European aircraft maker Airbus".

The decision could further ramp up tensions between the USA and Europe, which have been stoked by President TrumpDonald John TrumpAvenatti defends right to release Cohen's financial info Pruitt's 24/7 security requested over fears of Trump policy backlash Senate GOP anger over McCain insult grows MORE's criticism of EU trade policies, his refusal to provide a permanent exemption for tariffs on European steel and aluminum imports and last week's decision to leave the Iran nuclear deal.

European officials seized on Boeing's recent criticism of the A380's poor sales record as a way to limit any estimates of damage to Boeing caused by subsidies for the double-decker jet.

On today's ruling, both manufacturers are claiming victory. "The commercial success of products and services should be driven by their merits and not by market-distorting actions", declared Boeing chairman and CEO Dennis Muilenburg. Should the United States decide to retaliate, any countermeasures could take months to decide. It has meanwhile levelled significant subsidy claims against Boeing.

Novick didn't put a price tag on the countermeasures but said they would be in the billions every year.

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The tariffs won't likely to be imposed on planes, he said. This is expected to be the largest-ever WTO authorization of retaliatory tariffs.

The exact amount of allowed USA retaliation will be determined by a separate WTO process that could take months or even up to a year.

Malmstrom added: "Also, we look forward to the upcoming ruling by the appellate body on USA compliance with the WTO findings of the massive and persistent government support to Boeing".

"The WTO appellate body has definitively rejected the US challenge on the bulk of European Union support to Airbus, and agreed that the European Union has largely complied with its original findings", European Union trade commission Cecilia Malmstrom said in a statement.

"The result is simple: Airbus pays back its loans, Boeing pays back nothing and continues to exploit the generosity of the US taxpayer", outgoing Airbus CEO Tom Ender said.

"This landmark ruling by the WTO Appellate Body is the final decision in this case, which was initiated in 2006", the release said.

At the same time, however, the appellate division of WTO's Dispute Settlement Body dismissed a U.S. claim that loans for Airbus's most popular models, the A320 and A330, were costing Boeing significant sales.

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