Wednesday

22nd May 2019

Airbus calls for end of legal battles with Boeing

  • A Boeing 777. (Photo: Sebastien Lebrigand)

Airbus has called for a global agreement on subsidies for the aircraft industry, after the World Trade Organisation (WTO) ruled that Boeing benefited from illegal US tax breaks.

In the case brought by the EU against the US, a WTO panel ruled that Boeing had benefited from illegal tax breaks facilitating the development of its new B777X jets.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The panel also found that the US had discriminated against foreign suppliers because Boeing had agreed to use domestically produced wings in exchange for the scheme.

The case is part of a series of disputes - in September the WTO had said the EU had "failed to comply" with an earlier ruling to remove subsidies for Airbus.

The European plane-maker said on Monday (28 November) the latest ruling was a "knockout blow" to Boeing's "record-breaking subsidies".

The European Commission, which represented Airbus before the WTO, also celebrated the report. "We won the WTO dispute on Boeing," the EU executive tweeted, adding in a press release that Boeing had been set to gain €5.4 billion from the measure.

However, Boeing's lawyer J Michael Luttig noted the WTO had rejected almost all of the objections raised by Airbus and the EU, and also hailed the the ruling as a "complete victory".

The US company also pointed out that it had yet to benefit from the scheme, which was not due to roll out until 2020.

On Monday, both parties said they expected the other "losing" side to appeal the latest ruling, which is likely to drag on for more years.

Legal battles

The rows mask deeper unease about the future of the industry.

“This WTO battle is a battle of the past which benefits only the armies of lawyers both sides employ for more than a decade,” said Airbus chief executive Tom Enders in a written statement.

"I continue to think that the only way out of the ridiculous series of disputes … is to agree on a set of globally applicable rules for the support of the civil aircraft industry, which would benefit both sides of the Atlantic."

Enders, whose company is set to announce on Tuesday several hundred staff lay-offs in France and Germany, was highlighting the need for Airbus and Boeing to adapt to a new environment.

The two plane makers, which currently dominate the global aerospace industry, have for years been embroiled in legal conflicts over subsidies. Each party has won and lost battles, as both are dependent on aid.

At the end of the process, the ruling may not have any real effect because the WTO has no enforcement powers of its owns.

The EU could introduce sanctions on the US, but WTO members rarely do that because such steps risk triggering retaliatory tariffs on other products.


The prospects of such a trade war have been further heightened by the election of Donald Trump in US, who has expressed doubts about the international trade order.

Meanwhile, governments of Canada, Russia and Asia have also started to subsidise their own plane makers, threatening the domination of Airbus and Boeing.

EU delays decision on trade defence

Trade ministers send a discussion on the level of import duties back to diplomats, also admitting that TTIP talks with the US are "in the freezer".

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

EU and Japan in delicate trade talks

The Japanese PM comes to Brussels to discuss the first results of the new EU-Japan free trade deal, plus WTO reform - a sensitive topic before he moves onto Washington to face Donald Trump.

News in Brief

  1. European brands 'breaking' chemical safety rules
  2. Report: Merkel was lobbied to accept EU top job
  3. May struggling to get Brexit deal passed at fourth vote
  4. German MPs show interest in 'Magnitsky' sanctions
  5. CoE: Rights violations in Hungary 'must be addressed'
  6. EU affairs ministers rubber-stamp new ban on plastics
  7. Private companies campaign to boost turnout in EU poll
  8. Austrian government chaos as far-right ministers step down

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Join EUobserver

Support quality EU news

Join us