US wins aerospace subsidies trade case over the EU

The United States said Thursday it had won a World Trade Organization (WTO) dispute with the European Union (EU) over billions in illegal subsidies provided to France-based airplane-producer Airbus.

U.S. trade officials and congressional lawmakers said the WTO compliance panel report should spur the European Union and four member states — France, Germany, Spain and the United Kingdom — to immediately stop providing support for Airbus to the detriment of competitor Boeing and U.S. exports.

{mosads}U.S. Trade Representative Michael Froman said the report is a “sweeping victory for the United States and its aerospace workers.”

“We have long maintained that EU aircraft subsidies have cost American companies tens of billions of dollars in lost revenue, which this report clearly proves,” Froman said.  

“We expect the EU, Germany, France, the United Kingdom, and Spain — some of our closest trading partners — to respect WTO rules. We call on them to end subsidized financing of Airbus immediately,” he said.

The panel determined that the EU and the four countries had provided nearly $22 billion in subsidized financing that had caused Boeing to lose sales of more than 300 aircraft and to lose market share around the world.  

The decision found that the EU had not only failed to remedy the $18 billion in subsidies previously found in a 2011 ruling but determined that $4 billion more in new subsidized financing had been provided in the past five years, further hurting the U.S. aerospace industry.

In 2011, the WTO Appellate Body found that Airbus would not have existed and there would be no Airbus aircraft on the market at all without these subsidies.

Congressional lawmakers blasted the EU for funneling billions in illegal subsidies to Airbus in a case dating back 12 years to former President George W. Bush’s administration. 

“This is a huge victory for Northwest aerospace workers who have been building world-class airplanes for years,” said Sen. Maria Cantwell (D-Wash.), where Boeing manufacturers many of its airplanes. 

“With this decisive ruling, it is now time for the EU to come to the table and settle, rather than waiting for future tariffs,” Cantwell said. 

The illegal support for Airbus came mostly in the form of “launch aid” that had helped the aircraft manufacturer launch every model of its large civil aircraft.

Senate Finance Committee ranking member Ron Wyden (D-Ore.) said the WTO today sent a “clear message to Europe: Stop heaping billions in illegal subsidies on European companies.”

“The massive subsidies the EU keeps piling on Airbus are inconsistent with global trade rules, and cost Americans tens of billions in exports and good-paying jobs for aerospace workers in Oregon and throughout the United States,” Wyden said.

Rep. Rick Larsen (D-Wash.), the ranking member on the House Transportation and Infrastructure Subcommittee on Aviation, said the announcement “confirms what the U.S. has suspected for some time: that the European Union was unfairly subsidizing Airbus at the expense of American companies and workers, including many in my district.”

Chicago-based Boeing is the only U.S. producer of large civil aircraft and is the nation’s largest exporter.

“When other countries get away with breaking the rules, it puts our industries — and so many family-wage jobs up and down the supply chain — at risk,” said Sen. Patty Murray (D-Wash.).

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said the report “is a huge victory for the American aerospace industry and another major win in one of the largest trade disputes in modern history.”

“When our trading partners play by the rules, American companies win.”