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Mar. 24--European governments illegally subsidized Airbus, allowing it to overtake Boeing as the world's largest commercial airplane company, the World Trade Organization found in a final ruling Tuesday, March 23, that could have trans-Atlantic repercussions.
The ruling, which upheld interim findings released last September, will remain confidential for several months. But it was delivered to the Office of the U.S. Trade Representative and its European counterpart and its contents discussed by lawmakers who were briefed on the decision.
"Today's final ruling puts any doubts to rest -- launch aid is an illegal subsidy that has cost America jobs, hurt our ability to compete and damaged our overall economy," Sen. Patty Murray, D-Wash., said in a statement after being briefed.
Also briefed was Rep. Norm Dicks, D-Belfair, who said later the WTO had concluded that Airbus "could not have achieved the growth of market share -- harming U.S. workers -- without its pattern of illegal assistance.
"The ruling validates the U.S. government's longstanding contention that the European Union governments were utilizing this improper launch aid to steal American jobs, and it provides compelling evidence that we should use to demand Airbus begin playing by the rules."
The Europeans are expected to appeal.
The ruling is apparently a clear victory for Boeing, with the WTO finding the U.S. aerospace company had been harmed over the years. Exactly how Airbus could be punished remained unclear, though if the Europeans fail to comply with the ruling, the U.S. could eventually impose billions of dollars in punitive tariffs or other sanctions.
The Airbus subsidy case is considered the largest and most complicated trade dispute ever.
The WTO said four European countries -- France, Germany, Britain and Spain -- provided Airbus with risk-free loans, known as launch aid, to develop and build its aircraft.
Boeing has said Airbus received more than $15 billion worth of subsidies, which in today's dollars could have a true market value of roughly $200 billion.
Airbus received its first airplane order in 1971 and less than 40 years later had more than half the market for commercial airplanes.
In a statement, Boeing said the ruling should "level the competitive playing field once and for all with Airbus" and established a precedent for other nations thinking about launching their own commercial airplane business with subsidies.
Airbus, in its own statement, said that 70 percent of the U.S. claims in the subsidy case were rejected by the WTO. Airbus also said the European "reimbursable loan mechanism" was found to be a legal part of any relationship between government and industry.
"Airbus expects the WTO conflict to drag on for at least a few more years," the statement said, adding the issue will finally be resolved only with trans-Atlantic negotiations.
The WTO is expected to rule later this year in a separate case brought by the Europeans alleging Boeing received its own subsidies from the federal, state and local governments.
LES BLUMENTHAL covers issues about Washington state from the McClatchy bureau in Washington, D.C. He can be reached at [email protected].
