WTO Ruling Deals Blow to US Subsidy Scheme Favoring Boeing

The World Trade Organization (WTO) has dealt a significant blow to the United States' efforts to shield giant aircraft manufacturer Boeing from international competition. After a six-year battle, the WTO panel declared that the US subsidy scheme, known as the American Jobs Creation Act, violates international trade rules. The ruling marks a major victory for the European Union, which has long argued that the scheme constitutes an unfair advantage for US exporters. The EU estimates that Boeing has received around $750 million in illegal subsidies from the scheme.

Key Takeaways:

• The WTO panel ruled that the US subsidy scheme, introduced in 2004, continues to provide prohibited subsidies to Boeing, violating international trade rules.
• The EU has estimated that Boeing received around $750 million in illegal subsidies from the scheme, with thousands of US companies benefiting from the system.
• The EU has been challenging the original Foreign Sales Corporation regime since 1998, with the WTO finding in their favor in 1999 and 2000.
• The US has been authorized to retaliate against EU exports with sanctions worth up to $4 billion, which could be reintroduced at the start of next year if the US fails to comply with the WTO ruling.

Statistics:

• $750 million: Estimated amount of illegal subsidies received by Boeing from the American Jobs Creation Act.
• $4 billion: Maximum value of sanctions that the US is authorized to impose on EU exports in retaliation.
• 1998: Year the EU first challenged the Foreign Sales Corporation regime.
• 1999 and 2000: Years in which the WTO found in the EU's favor, declaring the regime an illegal subsidy.
• 2004: Year the US introduced the American Jobs Creation Act, which the WTO has now ruled is also in breach of international trade rules.

Sources:

• "The Times", Copyright (C) The Times, 2005
• The European Union
• The World Trade Organization (WTO)