Aerospace competition
9:24 am
Thu March 31, 2011

WTO rules Boeing received illegal government subsidies

The World Trade Organization has ruled that some U.S. government aid to aircraft maker Boeing Co. is illegal. 

The WTO's report details findings first issued in private to the EU and U.S. in January. It says the EU has demonstrated the U.S. gave Boeing "export subsidies that are prohibited" and recommends the U.S. either withdraw them or "take steps to remove the adverse affects." 

The report is based on an EU complaint and the dispute will likely next go to a WTO appeals panel.  The Geneva-based trade body also has faulted European governments for illegally supporting local aircraft maker Airbus, a unit of European Aeronautic Defence and Space Co. 

The Herald of Everett's Michelle Dunlop reports reaction from Boeing points to what the company sees as a disparity in illegal subsidies, when compared with Airbus: acknowledging $2.7 billion dollars in illegal aid, versus $20 billion for Airbus and the EU:

 

"This WTO ruling shatters the convenient myth that European governments must illegally subsidize Airbus to counter U.S. government assistance to Boeing," said J. Michael Luttig, Boeing executive vice president and general counsel, in a statement.

Boeing's view on the total amount of illegal subsidies varies from the WTO ruling, according to Reuters, which reports the WTO claims $5.3 billion in illegal activity, including research and development help from NASA: 

"It's time for Boeing to stop denying or minimizing the massive illegal subsidies it gets," said Rainer Ohler, head of public affairs and communications at Toulouse, France-based Airbus.

The plane makers can appeal the WTO findings, if they wish to do so, reports Reuters.