The EU wins case which proves Boeing received subsidies from United States

The WTO Panel report proves that billions of dollars in US Federal and State subsidies granted to Boeing are illegal under WTO rules. This landmark ruling confirms, that between 1989 and 2006, the US Federal and State governments granted WTO-incompatible subsidies to Boeing.

The ruling is supported by solid findings from the Panel covering each of the main sources of subsidisation provided by the US:

  • R&D programmes funds granted by NASA and the US Department of Defense (DoD) to Boeing amounting to 1.3 - 2 billion dollars.
  • NASA and DoD "general support" to the tune of 1.5 billion dollars.
  • Foreign Sales Corporation (FSC) export subsidies – 2.2 billion dollars.
  • Washington State tax breaks to a value of up to 4 billion dollars for the period 2006-24.

US and EU government support to their aircraft producers had been regulated by the so-called "Bilateral EU-US Agreement on Trade in Large Civil Aircraft". This agreement, concluded in 1992, allowed each party to provide a certain level of support to their respective aircraft industry. On the 6 October 2004, the United States  announced its withdrawal from the 1992 Agreement and immediately filed a challenge at the WTO of all EU support ever granted to Airbus. Since October 2004, the EU and US have been contesting at the WTO their Governments' respective support to their aerospace industries. Both WTO challenges relate to alleged illegal WTO support to respectively Airbus and Boeing over a 20 to 30 year period.

The subsidies are in violation of WTO Rules since they constitute actionable subsidies which cause adverse effects to the interests of the EU and Airbus. Moreover, in July 2010 the EU appealed the panel's findings in “Airbus case” and these proceedings are expected to be completed in the first half of 2011.