Thursday

22nd Jun 2017

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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".

Row between EU ministers halts e-book tax rate

A bill to reduce VAT rates on e-books and e-publications has become the latest victim of a row between the Czech Republic and its partners over its own plan to collect VAT.

Focus

EU and China move to fill US void

At a summit in Brussels, EU and Chinese leaders will attempt to deepen ties on trade and climate as US president Trump plans to pull out of the Paris climate deal.

Italy reaches EU deal on failing bank

After months of negotiations, the European Commission and Italy agreed on the terms of rescue for Monte dei Paschi di Siena bank, including job cuts, salary caps and private sector involvement in the bailout.

News in Brief

  1. Tusk can 'imagine' the UK still remaining in EU
  2. Norway offers more blocks for Arctic oil exploration
  3. EU court lowers evidence standards in vaccine ruling
  4. Merkel and Macron to speak at Kohl's EU ceremony
  5. EU commission presents plan to enhance tax transparency
  6. Romanian PM ousted in party revolt
  7. MEPs elect new internal market committee chairwoman
  8. Starbucks to hire 2,500 refugees

Stakeholders' Highlights

  1. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  2. Dialogue PlatformGlobalised Religions and the Dialogue Imperative. Join the Debate!
  3. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million
  4. EUSEW17Bringing Buildings Into the Circular Economy. Discuss at EU Sustainable Energy Week
  5. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  6. Malta EU 2017End of Roaming Charges: What Does It Entail?
  7. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move
  8. European Social Services ConferenceDriving innovation in the social sector – 26-28 June
  9. Dialogue PlatformMuslims Have Unique Responsibility to Fight Terror: Opinon From Fethullah Gülen
  10. EUSEW17Check out This Useful Infographic on How to Stay Sustainable and Energy Efficient.
  11. Martens CentreJoin Us on 21 June for a Debate With VP Katainen on the Future of European Defence
  12. Counter BalanceEuropean Parliament Criticises the Juncker Plan's Implementation

Latest News

  1. EU set to roll over Russia sanctions amid defence talks
  2. May to soothe EU leaders' post-election Brexit worries
  3. Leaders at EU summit to reinforce Libyan coast guard
  4. Macron reshuffles French government to ward off scandals
  5. Macron's summit debut could kickstart Franco-German motor
  6. Small EU states meet amid search to fill post-Brexit void
  7. Turkey received €1bn in EU money to develop democracy
  8. Bulgarian commissioner fields easy questions at MEP hearing