EU Seek WTO Approval For $12 Billion In Yearly Sanctions On US Over Boeing-Airbus Row
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The European Union will ask the World Trade Organisation for authorisation to impose up to $12 billion in annual trade sanctions on the U.S. for illegal subsidies made by the U.S. government to the Boeing Company, said a report by the Associated Press on Thursday, in the latest twist of a long-running EU-U.S. row over their respective aviation companies.
The European Union will ask the World Trade Organisation for authorisation to impose up to $12 billion in annual trade sanctions on the U.S. for illegal subsidies made by the U.S. government to the Boeing Company, said a report by the Associated Press on Thursday, in the latest twist of a long-running EU-U.S. row over their respective aviation companies.
According to Reuters, the request is the largest penalty ever brought forward to the WTO in history; while analysts say that the dispute is likely to turn into one of the world’s largest, and longest-running, trade disagreements of all time.
The latest claim by the EU will also dwarf a similar claim by the U.S. for $10 billion in sanctions; and is said to involve the launch of Boeing’s 787 aircraft, which Airbus says would not have been possible without illegal subsidies.
“The United States had not lived up to its obligation to remove its illegal subsidies in the aircraft sector, as required by the WTO rulings that clearly condemned U.S. subsidies to Boeing,” the EU said in a statement on Thursday.
[quote]”We had expected that the US would have finally complied in good faith with their international commitments…[and] we are disappointed that this does not seem to be the case. So, the US leaves us with no other choice but to take further legal action,” added EU Trade Commissioner Karel De Gucht.[/quote]Related: US Gave Boeing At Least $5.3 Billion In Illegal Subsidies: WTO Report
Related: US Airlines Hit Out At Government Subsidies To Foreign Rivals
Since 2004, both the U.S. and the EU have been locked in a bitter tit-for-tat at the WTO after
the administration of then-President George W. Bush unilaterally walked out of a 1992 aircraft-aid agreement with the EU.
Last December, the U.S. also filed a $10 billion claim against the EU for subsidies involving Airbus’s A350 passenger plane.
Neither party are willing to back down in what is essentially a duopoly in a market believed to be worth more than $3 trillion over the next decade.
The U.S. on its part responded to the latest sanctions claim by insisting that it had already ended its illegal support for Boeing, while dismissing suggestions that the U.S. had suffered a bigger loss at the WTO in the last two competing cases.
Related: The World Needs A New Trade Pact: Robert Zoellick et al.
“The WTO found that the EU granted $18 billion in subsidized financing, which caused 342 lost sales for the United States. The WTO found 2-4 billion dollars, mostly in subsidized research, against the United States, with 118 lost sales for Airbus,” said Nkenge Harmon, a spokeswoman for the U.S. Trade Representative’s office to Reuters.
