An appeals panel for the World Trade Organization has reversed an earlier ruling against an $8.7 billion Washington state tax incentive program that persuaded the Boeing Co. to build the 777X jet at its plant in Everett, Wash.
Boeing hailed Monday’s reversal as a “significant victory” for the federal Office of the U.S. Trade Representative and the U.S. aerospace industry, and a “resounding defeat” for the European Union’s efforts to justify subsidies to Airbus.
“Today’s ruling confirms that the tax treatment Boeing and others are receiving in Washington state is not a prohibited subsidy,” Boeing said in a statement.
“This was a sweeping and clean win for the United States,” Boeing general counsel J. Michael Luttig said. “It is now up to the European Union to comply with the WTO findings against it, and end the enduring practice of launch aid, which Airbus’ government supporters have continued to provide to each and every Airbus model.”
However, the ruling isn’t likely to end the Boeing-Airbus subsidy dispute anytime soon. In its own statement, Airbus said a separate review determined that Boeing’s subsidies were “illegal and actionable, causing massive harm to Airbus” – even though the appeals panel ruled that they were not technically “prohibited.”
“Boeing illegal subsidies are still illegal and need to be removed. If it is a ‘No’ or a ‘No No’ does not make big difference in global fair trade and play,” said Rainer Ohler, Airbus’ executive vice president for communications. ”The ‘game’ is far from over.”
If the years-long subsidy battle escalates, it could lead to rounds of U.S.-European trade sanctions and tariffs. However, it’s more likely that a settlement will eventually resolve the conflicting claims. The tiff already has gone on so long that it’s given Airbus enough time to come up with a tongue-in-cheek mobile game app called “WTO Warriors” (available via iTunes for iOS and Google Play for Android).