WTO: EU launches new trade dispute with US over Boeing subsidies

GMT 19:26 2014 Friday ,19 December

Arab Today, arab today WTO: EU launches new trade dispute with US over Boeing subsidies

World Trade Organisation
Geneva - AFP

The EU launched Friday a fresh trade dispute at the World Trade Organization, charging that the United States was providing "billions of dollars" in unfair subsidies to help Boeing build its new 777X jet.
The European Union said the United States was breaking WTO rules by offering "vastly expanded" tax incentives to the airplane maker, to ensure it develops, builds and sells its new model in the state of Washington.
Brussels said it had launched its request for consultations Friday in response to a decision by Washington State in November 2013, to extend subsidies to Boeing originally granted through 2024 until 2040.
The EU said the broadened subsidies were contrary to the WTO rules, "because they require the beneficiary to use domestic goods rather than imported ones".
"The subsidies scheme extension is estimated to be worth $8.7 billion (7.1 billion euros) and will be the largest subsidy for the civil aerospace industry in US history," the European Commission said in a statement.
The 777X, on which work was launched in 2013, is a new version of Boeing's successful 777 twin-engine widebody jet. It is scheduled to come into service around 2020, and the company has already received billions of dollars in advanced orders.
Brussels and Washington have been at odds for the past decade over the issue of government subsidies to Boeing and its European rival Airbus, with both having won and lost complaints filed against the other at the WTO.
The tit-for-tat trade dispute began in 2004 when the US accused Brussels of overstepping a 1992 bilateral agreement allowing aviation companies on both sides of the Atlantic to receive limited amounts of aid.
The EU's request Friday for consultations is the first step in a dispute within the WTO's Dispute Settlement System.
Washington would generally have 10 days to respond to the request, but due to the Christmas holidays, the EU had agreed to extend the deadline until January 7.
The consultations, which allow the parties to discuss the matter and reach a solution without proceeding to litigation, must begin within 30 days and generally cannot last longer than two months.
If they fail to reach an agreement, the complainant can request that a panel of experts be established to study the dispute and reach a verdict.


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