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Oct. 26 — The European Union said the World Trade Organization committed several “serious errors” when it found that EU member states failed to eliminate billions of dollars of illegal subsidies for the European aircraft consortium, Airbus Group SE.
The EU urged the WTO to reverse, modify or declare moot six key aspects of the Sept. 22 compliance ruling, which faulted the EU for continuing illegal loans and other financing schemes provided to Airbus (185 ITD, 9/23/16).
The breadth of the EU's appeal will likely prevent U.S. trade officials from pursuing retaliatory trade tariffs against the EU until 2017 at the earliest.
The U.S. claims that Europe's illegal subsidies to Airbus amounted to $22 billion and annually costs the U.S. tens of billions of dollars in lost exports.
The EU appeal outlines six specific aspects of the WTO compliance ruling where Brussels' believes the WTO either misinterpreted, misidentified or improperly assessed the EU's financial assistance schemes as illegal subsidies.
Specifically, the EU said the WTO:
In total, the EU said the WTO failed to adhere to articles 1.1(b), 5(c) 6.3, 6.4, 6.5 and 7.8, SCM Agreement and articles 3.2, 11 and 21.5 of the Dispute Settlement Understanding.
The appeal is the latest chapter in a long-running row between the EU and the U.S. regarding their respective aircraft manufacturing tax and subsidy regimes.
The case stems from the dissolution of a 1992 bilateral EU-U.S. agreement on trade in large civil aircraft that permitted each party to provide a certain level of support to their domestic aircraft industries.
After the U.S. withdrew from the agreement in 2004, it filed and won a WTO dispute in which it claimed France, Germany, Spain and the U.K. provided Airbus with subsidies that adversely affected U.S. interests in violation of WTO rules.
Next year, a separate WTO compliance panel is expected to deliver its decision as to whether the U.S. complied with the terms of a 2012 ruling against a series of illegal U.S. tax schemes that favored Boeing (105 ITD, 6/2/14).
Also pending is a separate EU dispute that claimed a U.S. aircraft subsidy scheme discriminated against imported goods because it required Boeing Co. to establish its 777X wing production and assembly in Washington state (97 ITD, 5/19/16).
To contact the reporter on this story: Bryce Baschuk in Geneva at firstname.lastname@example.org
To contact the editor responsible for this story: Jerome Ashton at email@example.com
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