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Aircraft industry

WTO Launches Investigation into Airbus-Boeing Trade Dispute

Strategic Insights

— 1 min read

The World Trade Organisation (WTO) has agreed to launch a formal investigation into the long-running trade dispute between the US and Europe over subsidies to Airbus and Boeing. The dispute, which has been ongoing for over three decades, involves billions of dollars in state subsidies provided to the two aircraft manufacturers. The US and Europe have accused each other of violating WTO rules, with the US seeking to eliminate subsidies to Airbus and Europe wanting the US to scrap its support for Boeing.

Key Takeaways:

  • The WTO has launched a formal investigation into the trade dispute between the US and Europe over subsidies to Airbus and Boeing.
  • The dispute involves billions of dollars in state subsidies provided to the two aircraft manufacturers, with the US and Europe accusing each other of violating WTO rules.
  • The US is seeking to eliminate subsidies to Airbus, while Europe wants the US to scrap its support for Boeing.
  • The panels established to handle the dispute are not expected to deliver a definitive verdict until late 2006, assuming recourse to the appeals procedure.
  • The case against US subsidies to Boeing rests on the benefits the company has received from research and development contracts from the US Department of Defense and Nasa, totaling $23bn since 1992.
  • Brussels claims that US subsidies to Boeing also include billions of dollars in tax breaks and other aid extended by local governments where its factories are located.

Statistics:

  • The US claims that Airbus has received $15bn in "launch aid" from France, Germany, the UK, and Spain since its creation in 1970.
  • Airbus has already received $3.7bn in launch aid loans for its A380 super-jumbo aircraft.
  • The consortium has requested $1.7bn in new loans for the A350, intended to compete with Boeing's 787 "Dreamliner".
  • The US and Europe are seeking to eliminate or reduce joint subsidies totaling $38bn.

Sources:

  • WTO press release (no date provided)
  • US Department of Defense and Nasa (no date provided)
  • Airbus and Boeing company reports (no date provided)

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