Thursday, March 28, 2024 | Ramadan 17, 1445 H
broken clouds
weather
OMAN
23°C / 23°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

WTO says US failed to halt state tax subsidy for Boeing

1176214
1176214
minus
plus

GENEVA/PARIS: The World Trade Organization said the United States had ignored its request to halt a subsidised tax break for Boeing Co in its main plane-making state of Washington as a 15-year-old transatlantic trade row edges towards tit-for-tat sanctions.


The European Union said the WTO appeal ruling had vindicated its claims that Boeing continued to receive illegal subsidies, but the United States said only one measure, a Washington state tax break worth around $100 million annually, had been found still to violate the rules.


The trade powers have been battling since 2004 over mutual claims of illegal aid to plane giants Boeing and Airbus, with parallel cases generating thousands of pages of findings and dense litigation that put a burden on the already congested WTO.


Both sides have been caught paying billions of dollars of subsidies to gain advantage in the global jet business, and asked to stop or face potential sanctions. The appeal ruling showed that the United States did not stop all subsidies when asked to do so, echoing an earlier finding against the EU.


The WTO’s Appellate Body, effectively the supreme court of world trade, ruled that the business and occupancy (B&O) tax rate reduction in Washington state had significantly cut Airbus sales in five particularly price-sensitive sales campaigns.


“The Appellate Body has now settled this case definitively, confirming our view the US has continued to subsidise Boeing despite WTO rulings to the contrary,” European Trade Commissioner Cecilia Malmstrom said in a statement.


But US Trade Representative Robert Lighthizer called the ruling a victory for the United States, since the WTO had found only one illegal subsidy while upholding an earlier rejection of EU claims that Boeing’s commercial aircraft programs received over $10 billion in illegal US subsidies.


“This report confirms what every other WTO report on these issues has found: the United States does not provide support even remotely comparable to the exceptionally large and harmful EU subsidies to Airbus,” Lighthizer said in a statement.


Boeing said it would support the new decision.


Any sanctions could broadly target industries beyond aerospace, but the impact of the record trade dispute on Boeing and Airbus AIR.PA themselves has so far been modest.


Analysts have long predicted the case would peter out or be settled without a trade war, but the prospect of retaliation is grabbing more attention than before amid global trade tensions.


Airbus said Boeing still received a raft of support and urged the United States to negotiate a “fair-trade environment” — a settlement proposal that Washington has so far rejected.


In a technical point, it said the WTO had resurrected a wider group of US subsidies which could be challenged later.


But Boeing said the slate had now been wiped clean of any unlawful subsidies in the United States, except for the Washington state measure which it agreed would now be amended.


“We trust that our example will prompt Airbus and the European Union to immediately bring themselves into full compliance with the substantial rulings against these parties by the WTO,” Boeing said in a statement. — Reuters


SHARE ARTICLE
arrow up
home icon