WTO Appellate Body confirms Airbus subsidies
The World Trade Organization Appellate Body on Wednesday confirmed that decades of subsidies provided by certain European Union member states to Airbus, totaling $18 billion, are inconsistent with WTO rules.
Specifically, the appellate body affirmed a WTO panel's original findings last year that every instance of launch aid provided for new Airbus planes during the past 40 years, as well as other subsidies the United States had challenged, caused adverse effects to the interests of the United States and as a result are WTO-inconsistent subsidies.
The appellate body also confirmed that launch aid and other challenged subsidies to Airbus have directly resulted in U.S.-based Boeing losing sales involving purchases of Airbus aircraft by easyJet, Air Berlin, Czech Airlines, Air Asia, Iberia, South African Airways, Thai Airways International, Singapore Airlines, Emirates Airlines, and Qantas ' and lost market share, with Airbus gaining market share in the European Union and in third country markets, including China and Korea at the expense of Boeing.
'This decision confirms what we have said all along, that none of the launch aid provided to Airbus is consistent with Europe's WTO obligations,' said U.S. Trade Representative Ron Kirk, in a statement. 'While it revised the underlying findings for the United States from $20 billion to $18 billion, the message in the appellate body report is clear ' launch aid is illegal and the European Union and the member states should refrain from future launch aid disbursements.'
Following adoption by the appellate body within 30 days, 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.
If the EU and the relevant member states fail to comply with these recommendations by the deadline, the United States could impose countermeasures. If the European Union and the member states assert compliance, but the United States disagrees, the United States could seek to have any disagreement referred back to the WTO panel.