WTO anti-subsidy ruling slows Dreamliner
A new WTO ruling is bad news for Boeing.
The World Trade Organisation’s newest ruling is expected to delay Dreamliner completion still further. The WTO ruled earlier this week that subsidies of nearly $5 billion paid to Boeing were illegal.
Main rival airplane manufacturer Airbus has suggested the Dreamliner would not even have initiated production without the illegal subsidies – an implication repudiated by Boeing. It said it would have built the plane just as it had even without the subsidies.
Airbus was hit similarly last June, when WTO ruled that European government subsidies to the manufacturer were illegal. According to the WTO, over 40 years of improper subsidies – including US$15 billion in below-market interest rate loans from European governments – had enabled Airbus to surpass Boeing as top aircraft builder.
At the time, Boeing chairman Jim McNerney was jubilant, calling it a “landmark decision” and a “sweeping legal victory” over subsidies that had given Airbus a major cost advantage. Airbus is estimated to have lost nearly $45 billion in sales to Boeing from 2001 and 2006 as a result of the subsidies.
A Boeing spokesperson said that the latest WTO report on Boeing doesn’t begin to compare to the multi-billion dollar subsidy amounts paid to Airbus.
"The WTO's decisions confirm that European launch aid stands alone as a massive illegal subsidy only available to Airbus, which has seriously harmed Boeing, distorted competition in the aerospace industry for decades, and resulted in the loss of tens of thousands of good-paying U.S. jobs.” No changes would be made in either policy or practice.
European Union trade commissioner spokesman John Clancy said, “This solid report sheds further light on the negative consequences for the E.U. industry of these U.S. subsidies and provides a timely element of balance in this long-running dispute.”
A full report is expected in the coming weeks.
Charlotte Woodfield
Thu, 03 Feb 2011
Thu, 03 Feb 2011
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WTO anti-subsidy ruling slows Dreamliner
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