|Boeing 777X. Photo: Boeing
[Avionics Magazine 11-29-2016] The World Trade Organization (WTO) ruled that the United States had ignored international trade rules by permitting illegal subsidies to Boeing for the integrated 777X. The Nov. 28 ruling follows a similar finding around illegal subsidies for Airbus in September, in which the WTO ruled that the European Union (EU) had provided Airbus with almost $5 million in illegal launch aid through government subsidies for its aircraft programs.
“The United States and Boeing picked this fight at the WTO, and today’s ruling is yet another blow for that strategy,” said Airbus CEO Tom Enders regarding the ruling. “Those prohibited subsidies must be withdrawn immediately following today’s historic ruling, meaning that Boeing must give up these massive tax subsidies.”
Boeing argued in its own statement that only $50 million of incentives were found illegal, citing that only one of seven challenged tax incentives were found illegal. Airbus released a statement claiming that the subsidies ruled illegal contributed to nearly $50 billion in lost sales for the European aerospace industry for the 777X alone.
J. Michael Luttig, Boeing's general counsel, said Boeing expects the EU and Airbus to appeal the ruling. "After any appeal," Luttig said, "we fully expect Boeing to preserve every aspect of the Washington state incentives, including the 777X revenue tax rate."